Comments on: How to recapitalise the banks http://www.irishelection.com/2008/11/how-to-recapitalise-the-banks/ Coverage of Irish Politics, News and Current Affairs Thu, 09 Feb 2012 19:43:54 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Irish Election » Oireachtas will vote on bank recapitalization http://www.irishelection.com/2008/11/how-to-recapitalise-the-banks/comment-page-1/#comment-107377 Irish Election » Oireachtas will vote on bank recapitalization Sun, 14 Dec 2008 22:22:32 +0000 http://www.irishelection.com/?p=3981#comment-107377 [...] called for a month ago on Irish Election the government has announced the creation of a 10 billion euro fund to [...] [...] called for a month ago on Irish Election the government has announced the creation of a 10 billion euro fund to [...]

]]> By: P O\'Neill http://www.irishelection.com/2008/11/how-to-recapitalise-the-banks/comment-page-1/#comment-100976 P O\'Neill Sun, 16 Nov 2008 18:29:09 +0000 http://www.irishelection.com/?p=3981#comment-100976 One thing for sure -- the dollar has appreciated a lot since this crisis began, which has caught a lot of people by surprise since it was expected to stay weak for a long time. Any banks betting on the dollar continuing weak would be in serious trouble. One thing for sure — the dollar has appreciated a lot since this crisis began, which has caught a lot of people by surprise since it was expected to stay weak for a long time. Any banks betting on the dollar continuing weak would be in serious trouble.

]]> By: Aaron McDaid http://www.irishelection.com/2008/11/how-to-recapitalise-the-banks/comment-page-1/#comment-100936 Aaron McDaid Sun, 16 Nov 2008 13:29:42 +0000 http://www.irishelection.com/?p=3981#comment-100936 Unlike the US and Britain, Ireland can't just turn on the printing presses and devalue the euro at will. And given that Germany are running a trade surplus, we can't expect that the euro's printing presses will be turned on. This is why Ireland might have to raise taxes and cut spending while Britain and the US can do the opposite. Of course, there are many other variables such as current levels of national debt, Irish trade position, and so on. This means we can't simply compare or contrast ourselves with the US, Britain, or Korea. My point is that there is one massive policy instrument available to the US and Britain which is not directly available to Ireland, namely control over our currency to avoid deflation and to devalue as an easy way to decrease some of our bank's debts. And I worry that our banking system is on its knees partly due to massive international dollar-denominated debts? Devaluing the euro won't help if we owe trillions of US dollars to China! Anybody got figures on this? Unlike the US and Britain, Ireland can’t just turn on the printing presses and devalue the euro at will. And given that Germany are running a trade surplus, we can’t expect that the euro’s printing presses will be turned on. This is why Ireland might have to raise taxes and cut spending while Britain and the US can do the opposite.

Of course, there are many other variables such as current levels of national debt, Irish trade position, and so on. This means we can’t simply compare or contrast ourselves with the US, Britain, or Korea. My point is that there is one massive policy instrument available to the US and Britain which is not directly available to Ireland, namely control over our currency to avoid deflation and to devalue as an easy way to decrease some of our bank’s debts.

And I worry that our banking system is on its knees partly due to massive international dollar-denominated debts? Devaluing the euro won’t help if we owe trillions of US dollars to China! Anybody got figures on this?

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