Anglo Irish Banks - a new addition to Public Sector

NewDubliner

From RTE

The Government has announced plans to take complete control of Anglo Irish Bank, saying its previous plan to inject money into the bank is not the best way to secure its viability...The Government had planned to inject €1.5bn into the bank, taking 75% of the voting rights in the process....

Does this mean we just saved ourselves 1.5bn?

Will the Anglo staff have their pay adjusted?

jmayo

NewDubliner wrote: »

From RTE

Does this mean we just saved ourselves 1.5bn?

Will the Anglo staff have their pay adjusted?

That is interesting since there is upcoming shareholder meeting in Mansion house.
Know a few of shareholders and they aren't happy campers
Also Kenny is supposedly going to quesiton in Dail (whenever they return) why the place should be wound down.

NewDubliner

jmayo wrote: »

That is interesting since there is upcoming shareholder meeting in Mansion house.
Know a few of shareholders and they aren't happy campers
Also Kenny is supposedly going to quesiton in Dail (whenever they return) why the place should be wound down.

It might buy the government some time as they won't compensate the shareholders until they've figured out what the bank is actually worth?

The shareholders can only blame the bank's management.

uberwolf

NewDubliner wrote: »

they won't compensate the shareholders

The company requires nationalisation as it is no longer a viable stand alone entity. The shareholders invested to make a return, and accepted a risk in order to make this return. There is no need to compensate them.

jlang

Should shed some light on how indebted the big property players are, or will the new owners of the bank be as reluctant to mark-to-market as the old? I can't see any return to normality until there's major bankruptcy among the developers and a fire sale of their assets.

Mr.Micro

Might come in handy for a bit of money laundering. It should have been let go to the wall. Bailing it out and now owning it was done for who? Property developers or cronies or both? Will the IMF have to be called in to Ireland?

AlekSmart

Hmmm...I wonder what the Dublin Docklands Development Authority will make of this....effectively their "preferred" bank now becomes at one with them....:)

quad_red

jlang wrote: »

Should shed some light on how indebted the big property players are, or will the new owners of the bank be as reluctant to mark-to-market as the old? I can't see any return to normality until there's major bankruptcy among the developers and a fire sale of their assets.

Not. a. chance.

We won't find out the true extent of what happened for a long time.

mike65

The interesting angle to all this is the relationship between Anglo-Irish bank and Sean Quinn Inc.

Oracle

Could the government develop Anglo into the much talked about, but never launched, "third force" in banking? This seems to be the perfect opportunity, albeit at the most difficult time.

Colonel Sanders

Shane Ross sounded like a man with a lot of questions he wanted answering on primetime.

If something is rotten in the state of the banana republic will this make it more or less likely that these will be answered?

The_Conductor

Oracle wrote: »

Could the government develop Anglo into the much talked about, but never launched, "third force" in banking? This seems to be the perfect opportunity, albeit at the most difficult time.

Alternatively- could the government transform Anglo Irish into the bank which the other retail banks could offload their dubious loans at a discount into- and in this manner clean up AIB, BOI etc of their odious loan books?

stepbar

uberwolf wrote: »

The company requires nationalisation as it is no longer a viable stand alone entity. The shareholders invested to make a return, and accepted a risk in order to make this return. There is no need to compensate them.

As much as I agree with you, I don't see it happen. Sean Quinn was some fool.

Mr.Micro

smccarrick wrote: »

Alternatively- could the government transform Anglo Irish into the bank which the other retail banks could offload their dubious loans at a discount into- and in this manner clean up AIB, BOI etc of their odious loan books?

That's what may well happen, all the toxic debt put in to the Anglo and no trace back to all the cronies.

The_Conductor

stepbar wrote: »

As much as I agree with you, I don't see it happen. Sean Quinn was some fool.

Have they ever figured out what his loans actually came to? First it was 83m, then 87m then there was a statement that there were/are further loans that have not yet been audited...... What the hell- he was using the bank like his personal piggy bank.....

The_Conductor

Mr.Micro wrote: »

That's what may well happen, all the toxic debt put in to the Anglo and no trace back to all the cronies.

Aka- all the property developers and builders who used to frequent the now defunct tent at the Galway races.......

stepbar

Mr.Micro wrote: »

That's what may well happen, all the toxic debt put in to the Anglo and no trace back to all the cronies.

Lol no trace back? Every loan in this country is approved by at least a credit dept and a manager, so there's trace back.

gurramok

One thing hasn't been mentioned yet here, it looks like the state is taking on all Anglo's debt now. We're talking billions of euro in a time of a national balance sheet crisis, i just hope Lenihan knows what he is doing.

Mr.Micro

smccarrick wrote: »

Have they ever figured out what his loans actually came to? First it was 83m, then 87m then there was a statement that there were/are further loans that have not yet been audited...... What the hell- he was using the bank like his personal piggy bank.....

All the while the Financial Regulator knew about this in 2007 but did nothing, only claiming the other day at the Oireachtas that it did not do anything at the time because of the banking crisis, only there was no banking crisis in 2007.

Mr.Micro

stepbar wrote: »

Lol no trace back? Every loan in this country is approved by at least a credit dept and a manager, so there's trace back.

yes, that's for us regular folk.

stepbar

jlang wrote: »

Should shed some light on how indebted the big property players are, or will the new owners of the bank be as reluctant to mark-to-market as the old? I can't see any return to normality until there's major bankruptcy among the developers and a fire sale of their assets.

You can be guarenteed that every large developer is exposed to Anglo. What the likes of AIB / BOI were declining (from existing connections), Anglo was approving. The likes of McNamara, Dunne etc just hopped over to Anglo when AIB / BOI declined.

stepbar

Mr.Micro wrote: »

yes, that's for us regular folk.

And what would that be of any interest to Joe Public? So same can bitch about it in the pub? The damage has been done, Joe Public won't change that.

uberwolf

Mr.Micro wrote: »

yes, that's for us regular folk.

Anti Money Laundering requirements allow little scope for maneuver. The borrower, the ultimate controlling entity and every step in between over 25% shareholding are fully documented with the directors for each required to provide d/l or pp, along with 2 forms of address verification.

nesf

uberwolf wrote: »

The company requires nationalisation as it is no longer a viable stand alone entity. The shareholders invested to make a return, and accepted a risk in order to make this return. There is no need to compensate them.

I disagree, the State should have to compensate shareholders when it takes over a company by law, just to ensure that the State can't abuse this power. Bear in mind that any compensation that Anglo shareholders should receive at market value would be relative peanuts but giving the State the power to seize companies without fairly compensating their owners is a dangerous step I think.

Mr.Micro

I will bet that all the toxic debt will be buried in the Anglo and then the Government will close the bank in a relatively short time, it will another bailout only in a different guise.

Het-Field

Another thundering disgrace. This Government is now resorting to communism to try and slither its way out of this debacle.

A bank which is guilty of reckless financial decisions should be allowed fall flat on its face. It is just like any other business. The taxpayer should not be asked to bail this company out. I am feeling robbed.

stepbar

gurramok wrote: »

One thing hasn't been mentioned yet here, it looks like the state is taking on all Anglo's debt now. We're talking billions of euro in a time of a national balance sheet crisis, i just hope Lenihan knows what he is doing.

It only becomes a problem if there's large writedowns. As long as the companies / individuals involved are making repayments there isn't a problem, regardless of the value of the asset. Not all the debt can be considered writeoff. I hope now that we will see a proper audit of Anglo's books to determine how many stressed loans are in the book and a indication given as to how much the state could be liable for.

Mr.Micro

uberwolf wrote: »

Anti Money Laundering requirements allow little scope for maneuver. The borrower, the ultimate controlling entity and every step in between over 25% shareholding are fully documented with the directors for each required to provide d/l or pp, along with 2 forms of address verification.

There appears to have been absolutely no regulation up to now, which is why our financial system is in a very bad way. Most of the same people are still in the banking system, so I will not hold my breath as to regulations being adhered to, let alone applied. The public will never know the full extent of the crisis.

Oracle

Of course the government did the right thing to nationalise Anglo. But it all comes across as too little, too late. As well as looking impulsive and unplanned. They're not the characteristics of a government that's decisive, informed and in charge.

uberwolf

Mr.Micro wrote: »

There appears to have been absolutely no regulation up to now, which is why our financial system is in a very bad way. Most of the same people are still in the banking system, so I will not hold my breath as to regulations being adhered to, let alone applied. The public will never know the full extent of the crisis.

Department of Justice is responsible for money laundering requirements.

The Banks don't know the full extent of the crisis yet, so the public are not far behind

stepbar

Mr.Micro wrote: »

I will bet that all the toxic debt will be buried in the Anglo and then the Government will close the bank in a relatively short time, it will another bailout only in a different guise.

And Man Utd to win 3-0 at the weekend :rolleyes: Will ya stop coming out with simplistic soundbites.

Mr.Micro

uberwolf wrote: »

Department of Justice is responsible for money laundering requirements.

The Banks don't know the full extent of the crisis yet, so the public are not far behind

Either way whoever, they were all asleep and a guy giving himself loans of 85 million and none of the watchdogs batted an eyelid.

stepbar

Mr.Micro wrote: »

There appears to have been absolutely no regulation up to now, which is why our financial system is in a very bad way. Most of the same people are still in the banking system, so I will not hold my breath as to regulations being adhered to, let alone applied. The public will never know the full extent of the crisis.

No regulations? Lol. Every bank signed up to the Basel accord would have been required to set aside capital for each and every loan approved. The Irish system is one of the most regulated in the world. You take what you want out of that one. The US on the other hand is not.

Mr.Micro

stepbar wrote: »

And Man Utd to win 3-0 at the weekend :rolleyes: Will ya stop coming out with simplistic soundbites.

It will be true, as it is really the only way that the orther banks can start a clean slate. The IMF may be waiting to run the finances, that's how bad the situation may be.

stepbar

Mr.Micro wrote: »

Either way whoever, they were all asleep and a guy giving himself loans of 85 million and none of the watchdogs batted an eyelid.

Ah sure he divied himself up an 85mill loan :rolleyes:

stepbar

Mr.Micro wrote: »

It will be true, as it is really the only way that the orther banks can start a clean slate. The IMF may be waiting to run the finances, that's how bad the situation may be.

Aw here I've heard enough. The guy who came out with that comment admitted that he was talking through his hat just like yourself.

Mr.Micro

stepbar wrote: »

No regulations? Lol. Every bank signed up to the Basel accord would have been required to set aside capital for each and every loan approved. The Irish system is one of the most regulated in the world. You take what you want out of that one. The US on the other hand is not.

If the regulations were applied but they were not, hence the financial mess and bailouts.

stepbar

Mr.Micro wrote: »

If the regulations were applied but they were not, hence the financial mess and bailouts.

That's so simplictic that it's not worth commenting on.....

nesf

Mr.Micro wrote: »

I will bet that all the toxic debt will be buried in the Anglo and then the Government will close the bank in a relatively short time, it will another bailout only in a different guise.

No, folding the company removes a bad entity from the market. Bailing them out would leave them there to do more damage. So utterly different things.

Mr.Micro wrote: »

There appears to have been absolutely no regulation up to now, which is why our financial system is in a very bad way.

What world are you living in, there's loads of regulation, it just wasn't good or targeted enough!

Christ, it really is depressing when this stuff jumps from the pink to the white pages.

capture3

Lets see how the Freedom of Information Act works here after take over by the state. Another lame duck to carry for generations.

Mr.Micro

stepbar wrote: »

That's so simplictic that it's not worth commenting on.....

So simple that it is fact, as the whole country knows now to its cost.

stepbar

Mr.Micro wrote: »

So simple that it is fact, as the whole country knows now to their cost.

Is it really? According to you? lol Since when did you become the bearer of all that is "fact"?

Mr.Micro

What world are you living in, there's loads of regulation, it just wasn't good or targeted enough!

which amounts to what?

nesf

Mr.Micro wrote: »

which amounts to what?

It doesn't in any logical sense equate to no regulation no matter what silly way you try to twist it.

Mr.Micro

nesf wrote: »

It doesn't in any logical sense equate to no regulation no matter what silly way you try to twist it.

If regulation exists and it is not applied adequately and properly then it might as well not exist, thats my point.

stepbar

Mr.Micro wrote: »

If regulation exists and it is not applied adequately and properly then it might as well not exist, thats my point.

So you're saying because parts of the regulation didn't work that we should dump same? Yep try that and we wouldn't be too far off what's happening in places like Zimbabwe.....

stepbar

Anyhow (on a lighter note), I welcome our new Public Sector employees. I wonder will there be as much oppostion to a paycut unlike our friends in the CPSU? (www.cpsu.ie - Rep was on Six One news tonight)

Mr.Micro

stepbar wrote: »

So you're saying because parts of the regulation didn't work that we should dump same? Yep try that and we wouldn't be too far off what's happening in places like Zimbabwe.....

No, I am suggesting that the regulations were not always applied in the banking system over the last number of years. Proof of that is perhaps the financial mess that the banks are in at the minute. I quoted an example some way back of what the financial regulators office said at the Oireachtas the other day as a reason for not taking issue with the Anglo in 2007.

stepbar

Mr.Micro wrote: »

No, I am suggesting that the regulations were not always applied in the banking system over the last number of years. Proof of that is perhaps the financial mess that the banks are in at the minute. I quoted an example some way back of what the financial regulators office said at the Oireachtas the other day as a reason for not taking issue with the Anglo in 2007.

Can you tell me what wrongdoings were carrried out (apart from morally)? The financial mess the banks etc are in stems from the US and sub prime, and a total freezing of interbank lending as a result. So getting back to what you've said, you're saying that because parts of the system didn't work that we should discount same as being useless?

Mr.Micro

stepbar wrote: »

Can you tell me what wrongdoings were carrried out (apart from morally)? The financial mess the banks etc are in stems from the US and sub prime, and a total freezing of interbank lending as a result. So getting back to what you've said, you're saying that because parts of the system didn't work that we should discount same as being useless?

Are you saying that the regulation has worked then? Also if a bank is required to put capital by for every loan it gives why then did all the banks need a bailout? We can blame the US all we like, we are supposed to regulate our own system, and if parts of a regulatory system do not work why keep them?

gurramok

stepbar wrote: »

It only becomes a problem if there's large writedowns. As long as the companies / individuals involved are making repayments there isn't a problem, regardless of the value of the asset. Not all the debt can be considered writeoff. I hope now that we will see a proper audit of Anglo's books to determine how many stressed loans are in the book and a indication given as to how much the state could be liable for.

That's the big question alright. Its just very scary reading of whats down the line.
Can developers on devaluing assets keep making those payments as we're not even half way through this housing crash?
Regarding my comment about Lenihan, i really hope and pray he knows what the loan book is really like and anticipate these write-offs in the future as we're talking a potential of billions, its disturbing thats all.

It'll be interesting what the economic commentators will think about this in tomorrows papers!