We need to recapitalise the banks and Anglo is costing us an arm and a leg. Why not transfer all the deposits from Anglo to AIB & BOI (which would capitalise them) and as per David McWilliams let the overseas bond holders take the hit?
Forgive me if I'm missing something obvious!!
Deposits don't capitalise banks because it is not risk capital. They are simply liabilities.
Can someone please lock this thread!
I am trying to assess on the scale of utter nonsense is this even worse than BL's "sell the deposits" moment. About the same, I would say. McWilliams says the plan is to liquidate the banks, do a deal with creditors (that presumably includes depositors) and then get that insurance company to make the depositors good. Apparently, the AXAs, Allianz' and Avivas of this world would only be panting for such "a huge slice" of business.That second option involves getting the creditors of the banks in a room and telling them the Irish people have no interest in propping up the banks any more. We would have to buy a deposit insurance policy from a large international insurance company (which big one wouldn't like such a huge slice of business?) and away we go.
I've just had a deposit selling moment of my own. Why doesn't the NTMA fill its boots with Ireland Credit Default Swaps (using a nominee account of course)
Then go ahead and default. Collect on the CDS and compensate the defaulted bondholders. Everyone's a winner except those silly people who write CDS.
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