Restructing of Banks going forward

We've been in this banking crisis for 2.5 years now, yet we still have not seen any widespread restructing of the banks and none seems to be on the cards. The policy seems to be to retain the main banks in more or less their current forms - maybe a few new Directors, but essentially allowing them to continue as before.

I would have thought that the cost of the bailout would have been something more radical. I would also have thought that efforts would be made to secure the high street retail banking services sector as we are continually being told that this is of systemic importance re: payment of peoples wages, atms, current accounts for small business etc.

For example, the high street banking sections of BOI & AIB could have been fractioned out from the bad parts of the banks and completely restructed. One idea would be to create 3 or 4 separate high street banks out of the combined BOI and AIB branches - each with a 50:50 mixture of BOI and AIB so as to ensure (i) that we retain competition in the sector and (ii) that none of the banks going forward have the ethos either company.

There have also been no efforts to sell of parts of branch networks to overseas banks or encourage overseas banks to set up in Ireland - current accounts and high street banking in Ireland are generally profitable, so Ireland would be an attractive market for an overseas bank, particularly if they were given a ready made network of branches.

It should be Government policy to encourage foreign banks to break into the Irish market as if the majority of high street banks are non-Irish, then if a crisis happens in the future, they'll be guaranteed in their parent countries thus getting us off the hook.

P.S. it should be illegal for any bank to have the words "Ireland" or "Irish" in their name (or any other name that is uniquely Irish) - damages our countries reputations if they get into trouble.

I have to agree with some of your points. I work for a bank and I really believe they need to be restructured for the good of the economy and the good of the country.

The execs still dont get it in these banks. Ill give you an example.

As a staff member we are constantly being told that money has to be saved and rightly so. Each section/area/department need to find savings.

My section made savings last year to the value of €80,000 or there abouts. This was done by ringing suppliers and asking them to provide there services cheaper and also cutting back on spending everywhere and anywhere it can be justified. My section saving €80k made me feel pretty good and I felt I was making a difference.
Today I got what felt like a punch to the stomach when I found out that a member of the executive team took delivery of a €76,000 car as part of his contract. Our savings wiped out so someone could drive around in a top of the range car.

Sickened, especially when I rang contractors asking for a discount when those contractors are probably already to the pin of their collar.

The quicker the banks are restructured the better for everyone in this country and I include bank staff in that.

I whole-heartedly agree. What should have happen 2.5 years ago, was a liquidator appointed to every bank that was not able to stand on its own two feet. The liquidator's first task would have been to find a buyer for the whole operation. If this failed then they would have looked at selling off assets and business divisions individually. As already noted, high street banking is a service that will always be in high demand, and is one thing in the banking industry that is actually working very well.

TheBanker, I am not at all surprised by your story and it highlights how despicable the behaviour of the managing elite of these bankrupt organisations really is. Had banks been allowed to fail, then all the executive management would have been out of work and pretty much unemployable, and rightfully so. Instead, these guys have become more employable in the eyes of the banking industry because of their "success" in getting a government bail out. Nothing good is ever going to come from not having allowed banks to fail.

The_Banker said:

I have to agree with some of your points. I work for a bank and I really believe they need to be restructured for the good of the economy and the good of the country.

The execs still dont get it in these banks. Ill give you an example.

As a staff member we are constantly being told that money has to be saved and rightly so. Each section/area/department need to find savings.

My section made savings last year to the value of €80,000 or there abouts. This was done by ringing suppliers and asking them to provide there services cheaper and also cutting back on spending everywhere and anywhere it can be justified. My section saving €80k made me feel pretty good and I felt I was making a difference.
Today I got what felt like a punch to the stomach when I found out that a member of the executive team took delivery of a €76,000 car as part of his contract. Our savings wiped out so someone could drive around in a top of the range car.

Sickened, especially when I rang contractors asking for a discount when those contractors are probably already to the pin of their collar.

The quicker the banks are restructured the better for everyone in this country and I include bank staff in that.

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Wow, that really is sickening The Banker. Pity there aren't people in charge, like you, that have a sense of decency about them.

There are many reasons that there has been very little change. The banks management do not want it. The more that people dig in to what the banks do, the more problems are found and there are enough out in the open to deal with already. You could probably half the number of bank staff in Ireland but that would dramatically increase unemployment so it is better to let the banks pay the salaries instead of increasing welfare costs. Bank staff are also bank customers so there is a whole collection of additional mortgages at risk.

Given the inevitability of the election there was a lot of fallout by forcing them to reform as there are lots of voters that would be negatively impacted and of course these staff had nothing to do with the problems.

It is baffling that there has not been major reform, it would be triggered by a sell off of one of the main banks but this is very unlikely if the political parties live up to their election promises of not allowing evictions. We would be trying to sell banks in an economy in trouble and the purchaser would not have control over the assets that they purchase as the state would constrain their ability to enforce contracts.

Yes its ludicrous. to think of the effects which have occurred on the private sector in terms of job losses/pay cuts as well as the cuts on public sector in pension levees, cuts etc., Have employees of aib/boi had any effects??? some members are still getting bonuses.