Yes, I might be better off, but I worked damn hard for that money and paid my fair share of tax on it.
I am just saying that those who benefited, should contribute to the cost.
Ah Boss gotta disagree with this. Depositors can withdraw their money at any time. What happened was that the government said "please, please, don't withdraw your deposits, look we'll guarantee them" and the depositors, like me, responded reluctantly "ok, ok". The depositors who stayed are the heroes here, the ones who prevented a complete collapse of our economy. I think a retrospective "thank you bonus" is in order.The people who had money on deposit got a retrospective guarantee which has cost the taxpayers a fortune. I am just saying that those who benefited, should contribute to the cost.
this wouldnt work as depositors would remove their money and there would be a run on the banks causing a total banking collapse.
Depositors can withdraw their money at any time.
Yes, but the rest of the taxpayers worked hard for their money as well. Why should they have to pay more tax to bail you out?
The point I am making is that it was not the government who made the concession it was the depositors. If the government thought that letting the banks go bust was in the national interest they would have done it. They did not guarantee depositors out of some moral sense of responsibility, they guaranteed them in the desperate hope that they would not desert the sinking ship. Any depositors that accepted this guarantee and kept the ship afloat are heroes, not villains to be retrospectively punished.Normally, yes. But if the government had not guaranteed the deposits (and bonds), you would have gone down to your local branch of Irish Nationwide and found the doors shut on the Monday of the guarantee.
There is billions and billions of euro held on deposit in this country sure no depositor will miss paying a bit more tax on it and as we are all aware the two Brian's are short of a few bob at the moment.
Normally, yes. But if the government had not guaranteed the deposits (and bonds), you would have gone down to your local branch of Irish Nationwide and found the doors shut on the Monday of the guarantee.
Brendan, are you saying that people at the time of the deposit guarantee were wrong to have left their money in the banks, and instead should have withdrawn it?
Where am I saying that?
I am saying very clearly that people who had money on deposit would have lost some or all of their money if the government had not guaranteed them retrospectively.
I have pointed out before when comparing deposits to shares and property that deposits are not risk-free. Financial institutions can and do go bust. It's not a question of being "wrong".
Lots of people had their money in An Post getting around 3% less than they could have got in Irish Nationwide or Anglo because it was government guaranteed. Those in Irish Nationwide and Anglo were taking higher risks. They should pay for the extra risk they took.
I for one would have preferred to see bond holders and depositors lose their money. As you said in a previous post, people have this false belief that their savings are a safe investment, when this is so obviously not true. A government guarantee, even for "only" €20k, only exacerbates this belief, in that people never thought that even savings above the guaranteed amount would not also be covered by government if a worst case scenario came true.People say we "we bailed out the banks" but this is a meaningless expression. We bailed out the depositors and bondholders who would have lost out if there was no guaranteed. A lot of people are saying that we should not have bailed out the bondholders, but rarely say we should not have bailed out the depositors.
But the cost of a CDS does not benefit those making the guarantee, i.e. the taxpayer. While there is a charge to the banks for the guarantee, the amount and the whole set up of the guarantee is completely insufficient.@Chris - The banks are already charged a rate for the deposit guarantee, i.e. CDS prices pushing up their borrowing rates. If CDS prices weren't being held because of EU/ECB funding for these banks (as aristotle said) you're right, they wouldn't be able to pay the rates that their actual position demands.
I agree that people should get incentives to save, not spend. But more government guarantees are as meaningful as the deposit guarantee. Reduce DIRT and people will save more, but don't have more politicians and bureaucracts concoct fancy savings schemes guaranteed by the taxpayer.Is there not more benefit is encouraging people to put their savings in Irish banks at low interest rates rather than instilling fear that they could and should lose some or all of that money?
....
Do the opposite, introduce an 8 year SSIA underwritten by the state which gives a bonus interest of 8% at the end of 8 years. The banks involved have to fund it but the state underwrites it and sure if all the banks go bust, the state probably will too so the underwriting is unlikely to cost anything. Positive is a potential rush of funds in to Irish banks.
They should not have lived in the false belief that savings are safe. If there were no guararntee then people would be forced to do some research before they deposit money.Depositors weren't made aware of any risks when opening accounts? You can't retrospectively change it now.
Where am I saying that?
My money is already out of the Irish system and has been for many months. I reckon Ireland will definitely fail and our incompetent government doesn't reassure me.
JoeBallantine, where have you put your money? Foreign bank in Ireland or bank in foreign country?
Well, my money isn't much, perhaps 25K or so. I've moved it into gold, through BullionVault. This also carries risk, but also potentially large gains, so I'm young and like the risk. I'm happy with that.
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