Make the depositors who were bailed out contribute to the retrospective guarantee?

Of all the people to make this argument, I'm still astonished that Brendan is doing so. On 16 Sep 2008 he went on RTE News to assure viewers that Irish banks are well-regulated and sound. He said on this site he did so because:

People were beginning to withdraw their money from Irish banks. RTE News tried to get Patrick Neary or the Minister for Finance to comment but they were not available. So I commented in an effort to calm people down and stop a run on Irish banks.
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http://www.askaboutmoney.com/showpost.php?p=1009250&postcount=22

So Brendan is effectively saying that those people who listened to his argument and accepted his advice and, perhaps for patriotic reasons, kept their money in Irish banks, should be punishing for doing so. Those who ignored him and instead, withdrew their money and perhaps put it abroad or into other safe investments, get away with it.
 


Canice, I think you're missing the point. The guarantee was increased since then from 20k to 100k. Brendan (I think) is arguing that those who have/had deposits > 20k should pay for that "insurance".

I don't personally agree with the prosposal, but I find some of the posts on this thread a bit harsh on Brendan. He is afterall providing this excellent forum for us all free of charge. Why can't people just say they don't agree and give the reasons?
 
Firefly said:
He is afterall providing this excellent forum for us all free of charge. Why can't people just say they don't agree and give the reasons?
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The reason I say I'm astonished is because I thought that Brendan would be the last person to want a run on banks. The upshot of this scheme - even the fear that it might happen - would be such a scenario. That would be worse than any money it might raise (not much in the scheme of things). It's quite likely that there is already capital flight at the moment, without even this fear.

There's also the issue of trust in our institutions, which has been broken in the last few years. Such a retroactive scheme would break that trust even more. People would fear that, no matter where they secured or invested their money from now on, the government can not only change the rules at any time, but retroactively change them to seize it; it's like something out of a right-wing scaremongering view of a communist country. The point about the increase is irrelevant, since people didn't ask for this guarantee; it wasn't an optional add-on at my bank.
 
Firefly said:
Canice, I think you're missing the point. The guarantee was increased since then from 20k to 100k. Brendan (I think) is arguing that those who have/had deposits > 20k should pay for that "insurance".
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I don't agree that Canice is missing the point here. Let's take it to the extreme then, why shouldn't the depositors 'pay' for the luxury of the 20K insurance also, what makes this 'insurance' sacrosant?

Anyone in the insurance industry will tell you that each contract has a clause which requires full disclosure of material facts between insured and insuree and any contravention here results in a voided contract. Does anyone think that the banks disclosed all material information to the government? Does anyone believe that the government couldn't renege on the guarantee? Does anyone really believe that their money was safe because of the guarantee and the government would honour their commitments? Would you really pay for this type of guarantee if it was optional and they asked you to pay a premium for it?

Firefly said:
I don't personally agree with the prosposal, but I find some of the posts on this thread a bit harsh on Brendan. He is afterall providing this excellent forum for us all free of charge. Why can't people just say they don't agree and give the reasons?
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Agreed that some of the posts seem to have a personal edge to them and I don't understand why, maybe I'm missing something here. But (and I hope that Brendan would agree) I don't believe that we should moderate our views because the suggestions are put forward by the person who is hosting the forum.
 
Indeed; it's a topsy-turvy country where, at the same time we're talking about seizing money from people who saved it away safely on deposits, "eminent" economists are saying we should bail out people who, as Primetime shows last night, invested (not saved, invested) in multiple properties in places like Dubai.
 
Anarchy said:
So he is allowed to make nonsensical suggestions without being told that? If he didn't own the site he would have really got told what people think.
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Of course you're allowed to disagree with anything that anyone proposes on this site, but remarks such as


  • What a fantastically terrible idea! You've outdone yourself Brendan!
  • Brendan, I always thoughts your posts had credibility - until now. You sound like Michael O'Leary trying to stir things up.
  • Pure and simple begrudgery Brendan. Nothing intellectual there at all. Your suggestion is offensive, and immoral.
are IMO a bit over the top. As I said, see post #2 on this thread, I think it's a bad idea.
[/QUOTE]
 
exactly, i am glad so many posters are taking a stance on this. We also worked very hard for the what we have and never bought in to any of the celtic tiger hype. To even contemplate that small savers like us should end up paying for the likes of fitzpatrick and drumm is pretty soul destroying to say the least.
 
If this dreadful idea is not dealt with soon then there will certainly be a run on banks. If it not has already happened. ...
 
[/QUOTE]
Wow! How could anyone find such posts OTT or unfair to the OP, considering the outrageous proposition he proposes and continues to defend. They are on the contrary very moderated and any other poster would have been told so in no uncertain terms..Brendan's been getting the kid glove treatment here due to his position. He is adding further insult to injury and really helping this Govt twist the knife which is bleeding the citizens of our country dry by his proposal, especially considering his own partial culpability in reassuring depositors at the time. Is this some kite being flown to test the waters for the govt, or what in the name of god possessed him to float such an idea at all?
Yes, lots of "in the know" people like us who visit this site and others like it, had their savings parceled away in <20k lots before the guarantee, as lots of us have also long since moved our savings out of the country altogether. But most people didn't, and trusted our politicians, financial regulators and indeed the host of people including Brendan himself who the govt trundled out to "reassure" the public. And now he wants to do a smash & grab that would make any FF highwayman proud! Shame on you Brendan, but perhaps you've actually done some good by finally putting the skids under the undecided and convinced them finally to get their savings as far away from this basket place country as possible.

@ Galwegian 44 Great post esp about the witholding of material facts from contract etc

@ Anarchy Well done, I share your feelings absolutely

@ Canicemcavoy + 1
 

On the proposal put forward by Brendan I'm totally in your camp as my replies in this thread have shown, I've called the proposal ludicrous!

However, this is, in essence, an online debate about the pros and cons of such a proposal and anyone who attacks the person rather than the proposal is missing the point of such a discussion. Lets focus on the that!
 
Anarchy said:
In the name of God where have I attacked the person in this?

I said his IDEA is stupid irresponsible and wrong ! If you interpret that as me saying that he is Stupid then that's your business!
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Anarchy, I'm not saying it was you that did this (and I don't feel it is my job to 'protect' Brendan as I'm sure he is well capable of that himself). I responded to your post because you had initially responded to me when I asked had I missed something about the personal nature of some of the posts. Anyway we're veering off the point here.

The proposal, on first read, sounded totally unfair and off the wall. After digesting it for a while I could see where Brendan was coming from with regard to levying a charge against a group of depositors who would have been worse off financially if the banks had fallen. However, this proposal is totally unfair in the environment we find ourselves in, and above all is totally unworkable. Having said that, I'm off to withdraw my money from the banks and buy some gold.....not gold shares, not ETF's etc but the real stuff. We're only half way down the slide and I still cannot see the bottom!
 
People who make suggestion like Brendan has made have their own wealth out of harms way somewhere off shore no doubt.
 
Well I have emptied the contents of my current account today, the teller asked me if I wanted a bank draft, no, cash please I said. I will sleep safer tonight knowing its under my mattress.
 
Most banks were only paying their "demand" deposit account holders .1 of 1%. So in effect, bank customers were only renting space in the bank's vault to keep their cash safe. If these people are charged 10% of their capital to rent space in a bank vault then it would make better sense for these depositors to get a big black refuse sack, dig a hole in their garden and hide their money for free. After all they will only be losing .1 of 1%.
 
Bcommercial said:
... the ball being the OP's suggestion to confiscate a proportion of people's savings to fund the bank bailout, and which I for one, am about to kick forever into touch! Enough damage done, and the less said the better on this one I'd say.
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If this is the case then it is totally immoral and also theft to take people hard earned money that they put into a bank for safekeeping and in retune the bank keep a big chunk of it to make good their own greed.

If that happens then no one will ever trust Irish bank again.
 


Why is Brendan advocating this idea and why does he want us savers to bail out the banks, does he know something we don't??????
 
Kev said:
If that happens then no one will ever trust Irish bank again.
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It will indeed be a very, very long time before anybody trusts an Irish bank again. That's why the guarantee keeps getting extended. People still trust the guarantee. I think the Boss' suggestion would destroy even that trust.
 
I don't think we should get personal in here. It is as valid a suggestion as any other to make, though a suggestion I totally disagree with. The banks and the country would be in a lot more trouble without the deposits, and it should be seen as patriotic that people are leaving their money on deposit in Irish banks rather than transferring those deposits abroad.
 
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