Would it not make sense to leave Anglo out?

€28bn is to be spent on buying into state ownership the bad debts of a bank that is already in state ownership. It strikes me as a waste of time at best.

Would it not make more sense to leave it out of NAMA and begin an orderly wind down of Anglo (sell off the performing loan book, hunt down and ultimately, if necessary, realise the security, and return funds to the depositors). Then the focus could go on saving the banks with real prospects of survival.

Can anyone explain to me why it's a good idea.

j26 said:

Can anyone explain to me why it's a good idea.

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Because if they give a big haircut to the Anglo loan book, they only have to give a small one to the rest of the banks, but can still claim a 30% average...

Realistically, if Anglo is to be a going concern again, it needs to exchange its bad loans for good assets (as it still has liabilities). Anglo is the only bank (so far) that the state should be setting up a bad bank for, as it is the only nationalised one.

Otherwise, you might as well liquidate Anglo and pay off its creditors. Some might say that this is the best policy...

But do we need Anglo to be a going concern again? That's what puzzles me.
Or if it's to be kept going, could it not be used as a vehicle for lending to SME's to get activity going again, but still wind down the major operation?

Is anyone else worried that the Minister for Finance is defending this on RTE because he claims we're already at the bottom of the market?

Anglo have not lent any money to anyone for months - hardly a "systemic" bank.
It should be wound down without a penny of taxpayers money going into it.