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What does he know and when will we know it?
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Here’s the text of the Credit Institutions (Financial Support) Bill being rushed through the Dail tonight by Brian Lenihan. You can read the whole thing and not see anything that resembles the media descriptions of the bill as a simple blanket liability guarantee for the 6 Irish HQ’d banks. Instead, as the debate this evening indicates, most of the bill is taken up with giving the Minister for Finance broad powers to engage in ownership and capital transactions with any bank, to override competition concerns in a merger or takeover, and to take on any debts of any bank to the Central Bank. In short, a broad hint that the minister quite soon expects to be dealing with a merger or takeover among the big banks, and may have to take on some liabilities of these banks to facilitate the deal. The kind of deal that is getting done with increasing frequency in the US by the Federal Deposit Insurance Corporation and the Federal Reserve or Treasury. This suggests that it’s not a good idea to focus on just one bank as being a source of trouble. There may be several. Out of 6.
its has been said that 4/6 would be dead by tomorrow if this bill had not been brought in on Friday. the knock on effect of the first bank (that started Lenihan’s response) going to the wall, as it was about to on Wednesday or today.
The Irish banks didn’t have to bother import bad loans from the rest of the world as the Irish banks were very good at making stupid loans right here in Ireland, destroying their own balance sheets in the process.
By loaning loads of money to unproductive fools and forcing many potentially-useful employees to train for the construction industry, ruining their chance of doing something with a future, these banks have destroyed the Tiger; the average Irish person hasn’t done an honest day’s work in years. Instead of banks carefully weighing up where to best employ our capital (‘a truck for this business, or computers for that business?’) they have enabled the unproductive people to import rubbish from abroad for personal entertainment. These scum were spending more than they earned, the banks helped them, and worse of all the scum think they are ‘entrepreneurs’ because they are engaged in a bigger, longer term, hire purchase agreement than did their neighbour. They do not own their homes, and we should never pretend otherwise; you don’t own the roof over your head until after you’ve fully payed the mortgage to the bank and then got your hands on the deeds.
This guarantee doesn’t change things very much. While it may entice more people to deposit money in Irish banks, they will of course expect a return on this in the form of interest. And the whole scam won’t work unless the banks can borrow (via these deposit accounts) at a lower rate than they lend. And as mortgage repayments plummet, they are effectively getting a negative return, and who is going to pay a bank to hold their money?!
At best, this guarantee will just mean that the banks can get away with paying slightly less interest on the deposit accounts; it doesn’t really fix the fact that the banks aren’t worth the paper they’re written on.
At least one Irish bank is doomed. What the government is doing here is getting the banks to borrow heavily to subsidize current income. The end result will be that the Irish banks are in debt to the tune of billions to individuals. The deposits will disappear as soon as they are lodged; desperately deployed by the bank’s to putting a sticking plaster over their laughable business.
The vote today on the capitalization of the banks was 74 in favour 66 against. How can I find out who voted for and who voted against and where are the remaining 26 votes gone.
Thank You John Carabini
John,
Go to http://www.oireachtas.ie and click on Parliamentary Debates and follow the links thereafter. That will bring you to the transcript for February 12th. The full record of who voted which way will be displayed in the text at the end of the debate. As for the 26 ‘missing’ votes, these are accounted for by people who either didn’t turn up on time for the actual vote (unusual and unlikely since the whips take strips off them afterwards!) or who were absent on other business and thus ‘paired’ one to one – government for opposition – under the normal arrangements between the party whips.
Just to augment Veronica’s information, the division is here. Technically there were two votes.
Veronica
Thanks
Regards John