Ross Maguire: "Bank bashing has gone too far in Ireland"

Brendan Burgess

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A good article in the Irish Times

Rage feeds populism but is not a policy and is incapable of providing a solution


Bank and fund bashing are a national pastime in Ireland (and to some extent deservedly so) but this has now developed a whiff of populism especially as it becomes associated with the challenge of homelessness.


The three ingredients are present.


The identified problem is forced repossessions. But while there have been some repossessions, there is nothing like the tsunami predicted. By international comparison there are very few repossessions here and Irish borrowers are the most protected in the world. This is not going to change.


Banks, so-called vulture funds and those identified as “vulture lovers” are blamed.





There is no analysis here. When we blame banks, who are we talking about? We don’t mean the teller or the director of human resources or the shareholder or the depositor. In this context “banks” and “bankers” are almost meaningless terms.
 

noproblem

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The big problem lies within what's written above. In the banking sector no one ever emerges as being the one in charge, the one who signs off, who makes that final decision, who accepts that the book stops at his/her door. If my business fails, I fail, i'm gone, end of. Maybe taking responsibility might help with peoples perception of "them". I do hate calling anyone by the term Them but by their behaviour they've earned the term.
 

mathepac

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They've copied the political/public service model where no one individual is ever responsible for anything. All decision are made anonymously by committee or external 3rd parties or dictated by "industry best practice" The buck never stops with any one individual or group and any publicly-funded (Séan & Síle always pay) "independent inquiry" into alleged wrong-doing will drag on for years will conclude nothing.
 

NoRegretsCoyote

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They've copied the political/public service model where no one individual is ever responsible for anything.
That's pretty much the case in any large private organisation too.

Shareholders generally do not like firms in mature industries being run on the whim of a CEO.

BTW, the banks with the most concentrated power (INBS, Anglo) made (proportionately) much greater losses than AIB/BoI etc where decision-making was less centralised.
 

Andy836

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The big problem lies within what's written above. In the banking sector no one ever emerges as being the one in charge, the one who signs off, who makes that final decision, who accepts that the book stops at his/her door. If my business fails, I fail, i'm gone, end of. Maybe taking responsibility might help with peoples perception of "them". I do hate calling anyone by the term Them but by their behaviour they've earned the term.
That's just not true and really reinforces the point the author was making.

Virtually all the shareholders were wiped out apart for some tiny value retained by BOI shareholders because they avoided full nationalization.
Apart from BOI the CEO's and senior management were pretty much all shown the door. Same for the boards.
 

Leo

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That's pretty much the case in any large private organisation too.
Pretty much any organisation of any scale really. Who would work in an environment where they could be hung out to dry in public for a mistake or poor decision? To be successful, companies need to operate as a cohesive organisation, not a collection of individuals.
 

Purple

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Who would work in an environment where they could be hung out to dry in public for a mistake or poor decision and had a pay cap which was lower than their international counterparts?
I added a bit
 
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Seagull

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That's just not true and really reinforces the point the author was making.

Virtually all the shareholders were wiped out apart for some tiny value retained by BOI shareholders because they avoided full nationalization.
Apart from BOI the CEO's and senior management were pretty much all shown the door. Same for the boards.
The bank boards were basically left with the choice of declaring themselves dishonest or incompetent. If they knew what was happening and allowed it, they were dishonest. If they didn't know what was happening, then they were incompetent. I know that's simplifying matters.
 

Andy836

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I added a bit
Well, it's not like they're actually competing in those markets.

A half mill for a CEO job in AIB or BOI seems fine. Neither bank is going to do anything world beating now and the top roles will largely just be stepping stones for jucier gigs elsewhere. I don't really think the public, nor their shareholders, want the banks doing anything exotic.
 

noproblem

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That's just not true and really reinforces the point the author was making.

Virtually all the shareholders were wiped out apart for some tiny value retained by BOI shareholders because they avoided full nationalization.
Apart from BOI the CEO's and senior management were pretty much all shown the door. Same for the boards.
Shown the door by who? you might like to inform us who was fired? Who was fined for incompetence, who accepted the responsibility? We all know the few who were taped and jailed, that few took the flak for the big boys Just when it all went belly up the goverment had done a deal with the banks on their criminality in the out of state deposit account debacle and stuck the account holders with the bill thereby not releasing BIG NAMES in political and Banking circles who were well involved, some RIP now. They now want big salaries back again and they're putting it out there in the public domain to measure peoples outrage. Will we ever learn in this country, ever?
 

NoRegretsCoyote

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Shown the door by who? you might like to inform us who was fired? Who was fined for incompetence, who accepted the responsibility?
Pretty much all the boards of AIB, INBS, Anglo and PTSB were turned over in the 18 months or so following the guarantee. All the CEOs bar BoI's were shown the door too.

Three or four bankers have been jailed (not sure after appeals).

This is all public knowledge.
 

noproblem

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Pretty much all the boards of AIB, INBS, Anglo and PTSB were turned over in the 18 months or so following the guarantee. All the CEOs bar BoI's were shown the door too.

Three or four bankers have been jailed (not sure after appeals).

This is all public knowledge.
You really should read what i've written. Who was FIRED, who Fired them, who accepted responsibility? That's just part of what I wrote in response to the article. Read it, then answer.
 

mathepac

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Virtually all the shareholders were wiped out
So what, such is the nature of gambling, sometimes you win, sometimes you lose. Shareholders have opportnities to change boards at AGMs or EGMs; if their boards lose their money then why does the ordinary tax-payer always pay? We're still paying insurance levies for failed insurance companies. Gallagher, PMPA, ICI anyone? RSA had the decency to pump a few quid in from head office after the books in the Irish operation appeared to have been cooked.
 
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NoRegretsCoyote

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I don't remember anyone, least of all me, suggesting that.

My point is that decision-making in banks was so layered (with dozens of people involved) that no one person was individually responsible.


There were a few cases of misreporting at Irish banks but these were responsible for a very small % of the overall losses.


Banks lost a lot of money by lending money that would never be repaid. Being bad at your job is not a crime.
 

Andy836

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So what, such is the nature of gambling, sometimes you win, sometimes you lose. Shareholders have opportnities to change boards at AGMs or EGMs; if their boards lose their money then why does the ordinary tax-payer always pay? We're still paying insurance levies for failed insurance companies. Gallagher, PMPA, ICI anyone? RSA had the decency to pump a few quid in from head office after the books in the Irish operation appeared to have been cooked.
Perhaps its the new format but you should still be able to see that my response was a direct response to the quoted post of NoProblem.

NoProblem complained that if his business went bust, he'd b wiped out, he'd loose his job, he takes responsibility. I was simply pointing out that the Banks senior management & boards nearly all lost their jobs and the shareholders were wiped out - which is the same thing.

Why does the taxpayer always pick up the tab? Well, because the taxpayers respresentatives are too scared of presiding over a financial disaster - say Quinn Insurance is permitted to go bust - they'd a lot of policy holders. There would have been lots of claims against them. If the insurer is bust and not supported then those policy holders will become liable for the claims against them. Politicians don't want to deal with that - one motorist making another motorist bankrupt because an insurance company failed. Sure there's even an insurance industry sponsored fund for scumbags who drive without insurance. Exact same with the Banks, no Irish politician was going to preside over depositors not getting their money back.
 

Andy836

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I dunno, what's standard for a business with 10k employees and a €100bn balance sheet?

There are 2.5k people in banking industry in the EU paid >€1m.
True, but AIB or BOI are not doing anything earth shattering.
I presume the bulk of those being paid over €1mm in the EU are in Investment Banking rather than vanilla mortgage banking.
And there's plenty of people to take on the role at that level even if they may depart shortly thereafter. Until they're no longer partly state owned the CEO positions are really only caretaker positions.
 
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