A few comments. Firstly a disclosure - I am a member of INBS (
Bobby I will address the morals of that later).
Got their Accounts this morning. Yep, Loans to Customers down from 10.5Bn to 2.4Bn. Also 2.2Bn in liquid assets, 5.7Bn due from NAMA and 2.7Bn promissory notes, bits and bobs with a grand total assets of 13.3Bn. General Reserves have gone from 1Bn positive to 1.5Bn negative but the "equity" of the Society is positive 1.2Bn after that 2.7Bn State contribution.
Let us make a clear distinction between "winding down" and liquidation. When I heard on RTE this morning that "winding down" was on the radar screen I nearly panicked and thought of packing a tent and high tailing it to my INBS branch. Because a liquidation would be no fun at all. Could wait for years for that guarantee to be honoured.
But there is no question of liquidation as the Society is amply solvent after that State injection, in fact it has quality assets and a substantial cushion to enable it to honour all its debts even without a State guarantee. INBS is in fact probably the best little outfit in town, I would trust it without the guarantee before some of the others. That is because INBS has really very little left of risky assets to lose, the vast majority of its assets are high quality. Other banks on the other hand still have considerable exposure to the economy.
"Winding down" is a different thing, that means closing it to new business. Ironically because INBS is now so strong as a result of State support, the EU might insist on its being closed down.
Now for the morals behind my greedy exploitation of the Bank guarantee
. I never for once regarded that I was lending to INBS, wouldn't touch them with a 40 foot. So far as I was concerned I was lending to the State and presumably the State would have been in a more precarious position if there hadn't been the likes of me prepared to accept their guarantee at face value.