Run on Banks, when's it going to happen here?

Country is still in a bad state but I think we're passed the run on the banks possibility at least.
As far as I know our banks have very little exposure to Greece

you'd ned to have a serious amount of cash, 5 or really 6 fig sums to be worried. I only have the few cent left from better times.....

Even so I doubt it will even come to that.

Theres no real run on the greek banks becuase most of the wealthy people have already moved the money elsewhere sometime ago.

The folks left are the day to day people with 'normal' accounts in that you get paid ad it's used up through the course of a month. Very hard to make a run on what isn't really there for very long as you need it to live on.

darkman2 wrote: »

OP, I have to say, I think it's very irresponsible to even have a thread like this. Bank runs are dangerous things. And once people get it wrongly into their heads that their money is not safe you could have a panic. That's what is happening in Greece right now though not a "run" more of a "jog". We really don't want any such movement developing here! And once talk of bank runs start it is so hard to get the genie back in the bottle. It can be a runaway train and everyone ultimately suffers the consequences.

Your money is fine. My money is fine. If people start withdrawing funds in bulk then our money is not safe. So why even ask?

Sorry darkman, but that is complete rubbish. The OP is only trying to look after his family (which is all we are really talking about) and he is well within his rights to bring up this topic. If others wish to keep their heads in the sand fine, but I'll happily discuss same with him.
Would you be happier if I discussed same via PM :rolleyes:

If you are lucky enough to have a few quid, I suggest you think on a bit.
No offence meant.

was there not a time limit on the bank gurantee made in 2008?

NIMAN wrote: »

I've always wondered where do people put their money when they withdraw it from a bank?

another bank not owned by the state, gold, shares...

The problem isnt the stability of the banks. The banks are supported with lots of money and the signs are that support will continue. The problem is the money. People in Greece are taking their money out of the banks because they want it in Euro notes not some digital illusion of money in an account. They dont want to wake up one day and hear that all their money has been switched from Euros to Drachma on a 1 to 1 basis and then the Drachma falls by 60% in first day of trading in effect wiping out most of their savings. The banks still have the same number of units of a currency just a very devalued one. If people have euro notes then they can keep them safe and once things stabilise they head to Germany for a day and convert them to Drachma without losing the 60%.

There will be minor flows from banks here until we have a better idea of what currency we will have. If we are allowed to stay in the main Euro then there wont be a run. But if it looks like we are moving back to the punt or into a division 2 euro (us, greece, spain, italy, portugal, cyprus etc) then there will be a full run on the banks. Most sensible businesses have made plans on how to move ther money in a hurry if they need to. It is just like any disaster recovery plan. Hopefully they will never use it but better to have the plan rather than be running around like a headless chicken on the morning that it all comea down. Most sensible people sholud have a similar plan for their persoal savings.

Unrealistic wrote: »

The Central Bank doesn't provide figures for those that I can see. Mortgage arrears, the arrears for which figures are readily available, are clearly accelerating. You claim overall arrears are actually slowing. That is not only are non-mortgage arrears slowing in and of themselves but they are doing so to such an extant that the cancel out the acceleration in mortgage arrears. On what basis?

Please try to distinguish between 'accelerating' and 'fluctuating around a trend', and restrict your claim to the latter if you cannot prove the former.

moderately,
Scofflaw

Scofflaw wrote: »

Please try to distinguish between 'accelerating' and 'fluctuating around a trend', and restrict your claim to the latter if you cannot prove the former.

moderately,
Scofflaw

Agreed it could be argued that four data points is not enough to distinguish between acceleration and fluctuation around a trend although, on the face of it, the data I included did show an acceleration rather than fluctuation. If we take the entire history from when the Central Bank first started publishing these statistics it is even more clear that growth in arrears is accelerating.

30/09/2009 3.3%
31/12/2009 3.6% (increased by 0.3%)
31/03/2010 4.1% (increased by 0.5%)
30/06/2010 4.6% (increased by 0.5%)
30/09/2010 5.1% (increased by 0.5%)
31/12/2010 5.7% (increased by 0.6%)
31/03/2011 6.3% (increased by 0.6%)
30/06/2011 7.1% (increased by 0.8%)
30/09/2011 8.1% (increased by 1.0%)
31/12/2011 9.2% (increased by 1.1%)

I'm really not going out on a limb here. Only repeating what established commentators have already reported. As I quoted in my original post Deutsche Bank via Bloomberg yesterday reported that:

Although resilient during 2009 and 2010, mortgage arrears have risen sharply over the past year

http://www.bloomberg.com/news/2012-05-18/irish-banks-may-tip-state-into-bailout-2-deutsche-bank-says.html

NAMA Wine Lake's assessment when the most recent set of statistics was published was:

The figures show a progressively worse deterioration in arrears.

http://namawinelake.wordpress.com/2012/02/17/one-in-14-irish-mortgages-is-more-than-six-months-in-arrears-latest-statistics-show/

Unrealistic wrote: »

Agreed it could be argued that four data points is not enough to distinguish between acceleration and fluctuation around a trend although, on the face of it, the data I included did show an acceleration rather than fluctuation. If we take the entire history from when the Central Bank first started publishing these statistics it is even more clear that growth in arrears is accelerating.

30/09/2009 3.3%
31/12/2009 3.6% (increased by 0.3%)
31/03/2010 4.1% (increased by 0.5%)
30/06/2010 4.6% (increased by 0.5%)
30/09/2010 5.1% (increased by 0.5%)
31/12/2010 5.7% (increased by 0.6%)
31/03/2011 6.3% (increased by 0.6%)
30/06/2011 7.1% (increased by 0.8%)
30/09/2011 8.1% (increased by 1.0%)
31/12/2011 9.2% (increased by 1.1%)

I'm really not going out on a limb here. Only repeating what established commentators have already reported. As I quoted in my original post Deutsche Bank via Bloomberg yesterday reported that:
http://www.bloomberg.com/news/2012-05-18/irish-banks-may-tip-state-into-bailout-2-deutsche-bank-says.html

NAMA Wine Lake's assessment when the most recent set of statistics was published was:
http://namawinelake.wordpress.com/2012/02/17/one-in-14-irish-mortgages-is-more-than-six-months-in-arrears-latest-statistics-show/

I think I'd agree with Namawinelake there - "a progressively worse deterioration in arrears". "Accelerating", I think, is a bit of a stretch - most people would take it as something rather more dramatic than the figures show.

You've also left out an important point:

At the end of September 2011, there are 773,420 private residential mortgage accounts held in the Republic of Ireland to a value of €114.4 billion. The stock of accounts continues to decline, from the 794,609 that were held at the end of September 2009. Of the current stock of accounts, 62,970, or 8.1%, are in arrears for more than 90 days. This compares with 55,763 accounts (7.2% of total) that were in arrears for more than 90 days at the end of June 2011.

The number of mortgages is declining. Now, mortgages in arrears are obviously not going to be amongst those paid off, and new mortgages are not being taken out at anything like the rate they're being paid off. So, while there is still a rise in the rate of increase, it's smaller than your figures show, as indeed is the underlying rate of mortgage arrears - because the % figure is the % of a declining number.

In case it's not clear what that means, imagine if everybody but the 62,970 problem mortgages from above paid off their mortgages. The figure for mortgages in arrears would then be 100%, although the overall situation has obviously improved massively!

cordially,
Scofflaw

Scofflaw wrote: »

I think I'd agree with Namawinelake there - "a progressively worse deterioration in arrears". "Accelerating", I think, is a bit of a stretch - most people would take it as something rather more dramatic than the figures show.

We're delving into semantics here surely? 'Progressively worse' (where 'worse' refers to an increase) is by definition an acceleration. Maybe it comes across as alarmist (although that wasn't my intention) but it is nevertheless accurate.

Scofflaw wrote: »

You've also left out an important point:

The number of mortgages is declining. Now, mortgages in arrears are obviously not going to be amongst those paid off, and new mortgages are not being taken out at anything like the rate they're being paid off. So, while there is still a rise in the rate of increase, it's smaller than your figures show, as indeed is the underlying rate of mortgage arrears - because the % figure is the % of a declining number.

In case it's not clear what that means, imagine if everybody but the 62,970 problem mortgages from above paid off their mortgages. The figure for mortgages in arrears would then be 100%, although the overall situation has obviously improved massively!

cordially,
Scofflaw

Agreed, that is a factor that needs to be considered although it is debatable how significant it is. Presuming many of those mortgages being paid down are those issued in the late eighties and early nineties running to the end of their term then, while their redemption decreases the number of mortgages outstanding, it has minimal impact on the total mortgage debt outstanding. If a mortgage reaches its term during a quarter then that is going to be one mortgage less in number but will probably reduce the total mortgage debt outstanding by less than €2k. But if a mortgage moves from performing to delinquent in a quarter that is also a change of one mortgage in terms of the number of mortgages but the resulting change in total mortgage debt outstanding is likely to be closer to €200k than €2k. (It is accepted that more recent mortgages are more likely to fall into arrears.) This criticism has been levelled at the Central Bank before (I think by NAMA Wine Lake and others) that their focus on the number of mortgages in trouble understates the real problem because the value of those mortgages in trouble is higher than the value of the average mortgage. The most recent stats show 9.2% of mortgages are in arrears, and this is the number the Central Bank focuses on, but these mortgages actually represent 12.3% of total mortgage debt outstanding.

Also, while we know mortgage balances have decreased over recent quarters, we do not know how much of that decrease is due to mortgages having been repaid and how much has been debt forgiveness/UK bankruptcy/other arrangements. This is important, getting back to the original point raised, because knowing how much of the €24 billion recapitalisation to cover mortgage losses is still available to cover the growing arrears (accelerating or otherwise) and how much has already been burned through is crucial in terms of evaluating the stability of our banks.

Francie Barrett wrote: »

There can never be a run on a Eurozone bank, the ECB will always step in to provide liquidity. This is the reason why Irish banks didn't go under when there was a stampede out the door awhile back.

Ireland was small enough to backstop at the time, the problem is if there's one in Greece it can spread to Spain & Italy, the Euro project is unravelling as far as I can see.

Unrealistic wrote: »

We're delving into semantics here surely? 'Progressively worse' (where 'worse' refers to an increase) is by definition an acceleration. Maybe it comes across as alarmist (although that wasn't my intention) but it is nevertheless accurate.

Yes, it's fundamentally just a question of nuance - "accelerating" conjures up a dramatic and runaway rate of increase, where "progressive" suggests something slower and steadier.

Unrealistic wrote: »

Agreed, that is a factor that needs to be considered although it is debatable how significant it is.

As per the numbers,really.

Unrealistic wrote: »

Presuming many of those mortgages being paid down are those issued in the late eighties and early nineties running to the end of their term then, while their redemption decreases the number of mortgages outstanding, it has minimal impact on the total mortgage debt outstanding. If a mortgage reaches its term during a quarter then that is going to be one mortgage less in number but will probably reduce the total mortgage debt outstanding by less than €2k. But if a mortgage moves from performing to delinquent in a quarter that is also a change of one mortgage in terms of the number of mortgages but the resulting change in total mortgage debt outstanding is likely to be closer to €200k than €2k. (It is accepted that more recent mortgages are more likely to fall into arrears.) This criticism has been levelled at the Central Bank before (I think by NAMA Wine Lake and others) that their focus on the number of mortgages in trouble understates the real problem because the value of those mortgages in trouble is higher than the value of the average mortgage. The most recent stats show 9.2% of mortgages are in arrears, and this is the number the Central Bank focuses on, but these mortgages actually represent 12.3% of total mortgage debt outstanding.

Good point. It would really be more meaningful to look at what proportion of the banks' loan books are affected.

Unrealistic wrote: »

Also, while we know mortgage balances have decreased over recent quarters, we do not know how much of that decrease is due to mortgages having been repaid and how much has been debt forgiveness/UK bankruptcy/other arrangements. This is important, getting back to the original point raised, because knowing how much of the €24 billion recapitalisation to cover mortgage losses is still available to cover the growing arrears (accelerating or otherwise) and how much has already been burned through is crucial in terms of evaluating the stability of our banks.

Sure. See, for example: http://www.irishtimes.com/newspaper/finance/2012/0516/1224316193530.html

Although I'll admit that the last three years have made me as wary of Irish financial journalism as of official forecasts and celebrity economists - I'd prefer to look at the figures myself.

cordially,
Scofflaw

This is one of the first things I'd change in terms of overhauling the monetary system: We need a system in which a bank run doesn't matter, as a bank has enough money to either be equal or more than the current sum of total deposits.

Sound ridiculous? It's actually not. There should be a type of bank which simply holds your money for you, completely separate from any lending business.
If you think it sounds impossible, that's because you're thinking within the parameters of the current financial and monetary system, which would be irrelevant if we're tearing that up and starting anew :P

A large number of people taking out their own money from banks, which they have every right to do, should not have the capability to put other depositors' money at risk. It's a bit ludicrous.

There should be a type of bank which simply holds your money for you, completely separate from any lending business.

Such a bank would have to charge you, whereas regular banks pay you interest.