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Should we save Anglo?

  • 21-01-2009 10:11am
    #1
    Closed Accounts Posts: 459 ✭✭


    Can we get a poll on this?

    Can anyone give me one good reason as to why we should save Anglo. They dont have one personal customer branch and all their loans were provided primarily to property developers. So why exactly are we bailing them out?


«1

Comments

  • Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    Bren1609 wrote: »
    Can we get a poll on this?

    Can anyone give me one good reason as to why we should save Anglo. They dont have one personal customer branch and all their loans were provided primarily to property developers. So why exactly are we bailing them out?

    Because property developers own Fianna Fail and are calling in a favour. Not much point having politicians in your pocket if you aren't going to get them to do favours for you when things are bad.


  • Closed Accounts Posts: 532 ✭✭✭Pub07


    Well I hate FF as much as the rest of you but I keep hearing this line from Lenehan, etc.. that if they let Anglo go bust it would completely destroy all confidence left in the Irish banking system and would lead to an even worse situation than nationalising it. I think on prime time last night he said that some other countries such as iceland, i think, let bank(s) go bust and it was total disaster. So whats the deal on the reasoning the government is giving for nationalising Anglo, is it valid or what?


  • Closed Accounts Posts: 453 ✭✭nuttz


    Because property developers own Fianna Fail and are calling in a favour. Not much point having politicians in your pocket if you aren't going to get them to do favours for you when things are bad.

    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Bren1609 wrote: »
    Can we get a poll on this?

    Can anyone give me one good reason as to why we should save Anglo. They dont have one personal customer branch and all their loans were provided primarily to property developers. So why exactly are we bailing them out?

    leaving aside the fact that it's too late....:rolleyes:

    my answer is 'no, they are of no systemic importance to the Irish banking system and wider economy. We should let them go the wall and let the shareholders, bondholders and employees take the hit. We should also send the CAB in to investigate the bank's books fully. We shoud also let INBS fail.

    We should concentrate all of our available resources on saving AIB and BoI, nationalisation appears inevitable. They should then be merged, stripped to the bone as regards costs, infrastructure and staff.

    The head of the Central Bank should be fired immediately without benefits.'


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Pub07 wrote: »
    Well I hate FF as much as the rest of you but I keep hearing this line from Lenehan, etc.. that if they let Anglo go bust it would completely destroy all confidence left in the Irish banking system

    seen AIB and BoI's share price lately?

    it's already happened; the Irish banking system effectively no longer exists


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  • Closed Accounts Posts: 379 ✭✭LoveDucati2


    Anglo has about 30-40 billion Euro in toxic debt, the overvaluation of its assets of 80 billion is where the problem is. The clueless b4stardos in government have just consigned us to the scrap heap. The country will now be liable for this.

    Unemployment will hit 20% + this year, and the budget deficit will go from (wait .. the Gov do not even know what it is) €19 billion to upwards of 30 billion unless DRASTIC measures are taken now.

    No more talking, meetings or the inability to take any kind of action. This shower are completely incapable, if you think this year is gonna be bad, wait for the next couple. Mass mortgage defaults, credit card debt, no employment, I will be starting a seperate thread on this.


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    nuttz wrote: »
    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html

    my prediction is that thise words will come back to bite him in the ass

    he also said that Anglo was sound ;)


  • Registered Users, Registered Users 2 Posts: 2,905 ✭✭✭Rob_l


    nuttz wrote: »
    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html

    Im sorry you want to believe this because lenihan says so? :eek:


  • Registered Users, Registered Users 2 Posts: 1,210 ✭✭✭20goto10


    Surely nationalising them is the cheapest option. What were they worth when shares were suspended, €170mill? I'd expect the government to offer maybe €120mill to take them over. How much would letting them go bust cost the taxpayer? €5bn? And if you include the knock on effect it could be a hell of a lot more.


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    20goto10 wrote: »
    Surely nationalising them is the cheapest option. What were they worth when shares were suspended, €170mill? I'd expect the government to offer maybe €120mill to take them over. How much would letting them go bust cost the taxpayer? €5bn? And if you include the knock on effect it could be a hell of a lot more.

    if they were not covered by the Guarantee, letting them go bust would cost the taxpayer zero

    nobody knows what the true extent of their liabilities versus their assets (marked to market on a realistic basis) is. We just know that it's big, very big and could be up to 30 billion euros.

    nationalisation was an act of national treachery, just as was extending the guarantee to Anglo and INBS


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  • Closed Accounts Posts: 532 ✭✭✭Pub07


    So do people think letting Anglo go bust would have no effect on the irish banking system as a whole and Lenehan is talking complete sh|te?


  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    The problem is the banking Gurantee the Government gave, if we were to let Anglo go bust that Gurantee would be called in and the Tax Payer would have to make up the difference between deposits and assets - bad debts.

    It would also cause an even more serious crash in the banking sector yes I know BOI and AIB are below 50 cent but a lot of the money in Anglo was from outside the state and if Anglo was let go it would have serious longterm affects for international investors putting money into Ireland.

    If BOI and AIB can hold their own and make enough money to pay a perference dividend then the Government can invest capital without wiping out the ordinary shares and there is no need for Anglo to become a "Bad Bank".

    If however AIB and BOI are going to collapse then the State will need to make Anglo a bad bank bail out AIB and BOI by taking on the bad debts and then Anglo can try and work their way out the mess.

    The problem here is no-one knows how bad things are going to get, the Bank Gurantee would not have been given imo if the Government knew how bad things were in Anglo, everyone is guessing and the Government are no different.

    A state cannot function without a solid banking system we just need to find the best way to stabilise the banks, imo A merger bewteen BOI and AIB is worth looking at, the banks won't want it but if they merged and were able to sustain themselves imo that would be better than the State injecting Capital and putting the expense of guranteed dividend on pref shares


  • Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    if they were not covered by the Guarantee, letting them go bust would cost the taxpayer zero
    If they have no money in accounts with them.


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    If they have no money in accounts with them.

    I use the term 'the taxpayer' interchangeably with 'The Exchequer' ;)

    caveat emptor imo when it comes to where you place your deposits


  • Registered Users, Registered Users 2 Posts: 6,287 ✭✭✭Talisman


    Pub07 wrote: »
    So do people think letting Anglo go bust would have no effect on the irish banking system as a whole and Lenehan is talking complete sh|te?
    Following the decision to include Anglo Irish in the guarantee the option to allow the bank fold was not possible. After that the Irish tax payer became liable for the debts of Anglo Irish if the bank collapsed - considering there are only a few million of us that is a serious debt for us to be carrying on top of whatever personal debt each individual may have.


  • Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    I use the term 'the taxpayer' interchangeably with 'The Exchequer' ;)

    caveat emptor imo when it comes to where you place your deposits
    Ahhh... but don't you think 'The Exchequer' might take a wee hit from the sudden collapse in wealth in the economy?


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    It would also cause an even more serious crash in the banking sector yes I know BOI and AIB are below 50 cent but a lot of the money in Anglo was from outside the state and if Anglo was let go it would have serious longterm affects for international investors putting money into Ireland.

    I work in the investment industry; believe me, no-one is putting money into Ireland right now. We're a banana republic in their eyes.

    That's why Lenihan's talk about systemic risks and investor confidence etc is so laughable. We're already at the bottom.
    Villain wrote: »
    If BOI and AIB can hold their own and make enough money to pay a perference dividend then the Government can invest capital without wiping out the ordinary shares and there is no need for Anglo to become a "Bad Bank".

    they're dead in the water and nationalisation is the only option.

    lol, the ordinary shares are already wiped out!

    Villain wrote: »
    If however AIB and BOI are going to collapse then the State will need to make Anglo a bad bank bail out AIB and BOI by taking on the bad debts and then Anglo can try and work their way out the mess.

    inevitable imo
    Villain wrote: »
    The problem here is no-one knows how bad things are going to get, the Bank Gurantee would not have been given imo if the Government knew how bad things were in Anglo, everyone is guessing and the Government are no different.

    rubbish - what about the PWC report? what about IFSRA returns? central bank numbers?

    are they all fantasy? (yes is the answer but the Govt cannot plead ignorance, stupidity maybe)
    Villain wrote: »
    A state cannot function without a solid banking system we just need to find the best way to stabilise the banks, imo A merger bewteen BOI and AIB is worth looking at, the banks won't want it but if they merged and were able to sustain themselves imo that would be better than the State injecting Capital and putting the expense of guranteed dividend on pref shares

    we don't have a banking sector now, the patient is dead and we're just waiting for the funeral


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Ahhh... but don't you think 'The Exchequer' might take a wee hit from the sudden collapse in wealth in the economy?

    check out the tax returns prior to Anglo's nationalisation; 'The Exchequer' is already fooked. Why socialise up to 30bn more in losses?


  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    I work in the investment industry; believe me, no-one is putting money into Ireland right now. We're a banana republic in their eyes.

    That's why Lenihan's talk about systemic risks and investor confidence etc is so laughable. We're already at the bottom.

    Thats why I mentioned the word "longterm" in my post. I don't think we are near the bottom yet.

    they're dead in the water and nationalisation is the only option.

    lol, the ordinary shares are already wiped out!

    We don't know that well I don't know, I don't know how the loan books are in either banks.

    The ordinary shares have been wiped out in value but they are still there and if the banks could survive without been nationalised or giving the Government ordinary shares, they may be worth something in the future.

    rubbish - what about the PWC report? what about IFSRA returns? central bank numbers?

    are they all fantasy? (yes is the answer but the Govt cannot plead ignorance, stupidity maybe)

    They don't tell us the future.

    we don't have a banking sector now, the patient is dead and we're just waiting for the funeral

    That's a good analogy but imo the patient is on a life support machine and the government need to decide to turn it off or give capital hoping that one day the patient will return.

    We still have 2 million people in employment thats a lot of Mortgages still been paid for the moment


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    Thats why I mentioned the word "longterm" in my post. I don't think we are near the bottom yet.

    sorry should have been more precise; we're at the bottom when it comes to our reputation as a home for investment funds. Clearly we are nowhere near the bottom of economic misery yet.
    Villain wrote: »
    The ordinary shares have been wiped out in value but they are still there and if the banks could survive without been nationalised or giving the Government ordinary shares, they may be worth something in the future.

    the market and institutions have already decided on this; they won't touch the shares or subscribe to any rights issue. The Government is the last chance saloon.

    I wonder if Eugene Sheehy is still claiming that AIB would rather die than raise capital? I hear rumours they are desperately try to flog their American and Polish subs.
    Villain wrote: »
    We still have 2 million people in employment thats a lot of Mortgages still been paid for the moment

    it's commercial property loans that are the real problem, not residential. Most homeowners will find a way to repay their PPR mortgage (even if it ends up costing them 4 times as much as the market value of the house :rolleyes:)


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  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    Commercial Property loans will cause the main issues, but I still think that as large Residental banks AIB and BOI will still have a large chunk of their loan book that is healthy, the problem as I said in my last post is I have no idea what those Loan books look like, I would have thought residental would make up a large chunk of it but I'm guessing?

    Eugene Sheehy may well have to come with his tail between his legs begging for capital or perhaps their loan book is strong enough to handle the bad debts.

    Do you think AIB and BOI will have to be nationalised?


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    Commercial Property loans will cause the main issues, but I still think that as large Residental banks AIB and BOI will still have a large chunk of their loan book that is healthy, the problem as I said in my last post is I have no idea what those Loan books look like, I would have thought residental would make up a large chunk of it but I'm guessing?

    residential will be a horror story too as unemployment begins to really bite and negative equity gets bigger and bigger. Most people are only 3 paychecks from bankruptcy - facile but true.
    Villain wrote: »
    Eugene Sheehy may well have to come with his tail between his legs begging for capital or perhaps their loan book is strong enough to handle the bad debts.

    if it was strong enough do you think they'd be selling the family silver and begging the Govt for capital?
    Villain wrote: »
    Do you think AIB and BOI will have to be nationalised?

    :confused:
    they're dead in the water and nationalisation is the only option.

    :cool:


  • Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    nuttz wrote: »
    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html

    Basis? Common sense and an understanding of how business in Ireland works

    read this

    http://www.irishtimes.com/newspaper/...059661333.html

    There is NO commercial, systemic or economic reason to save Anglo. They are a small private wealth bank whose loan book was ridiciliously overweight to one sector of the economy, who happen to be the most politically powerful lobby group of them all.


  • Closed Accounts Posts: 453 ✭✭nuttz


    Basis? Common sense and an understanding of how business in Ireland works

    read this

    http://www.irishtimes.com/newspaper/...059661333.html

    There is NO commercial, systemic or economic reason to save Anglo. They are a small private wealth bank whose loan book was ridiciliously overweight to one sector of the economy, who happen to be the most politically powerful lobby group of them all.



    to suggest that the only reason Anglo was nationalised is because the property developers have FF in their pocket is a tad naive.

    your link is broken.


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    nuttz wrote: »
    to suggest that the only reason Anglo was nationalised is because the property developers have FF in their pocket is a tad naive.

    seeing as you disagree, what do you see as the reasons?


  • Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    nuttz wrote: »
    to suggest that the only reason Anglo was nationalised is because the property developers have FF in their pocket is a tad naive.

    your link is broken.

    Apologies on the link - here it is http://www.irishtimes.com/newspaper/opinion/2009/0120/1232059661333.html

    With respect, you are the one taking the minister at face value, yet I am naive? Anglo were well known in banking circles for being, ahem, moody, and their risk rating even in the good times reflected that.

    Read the above article, I would be interested to see what you think.


  • Registered Users, Registered Users 2 Posts: 13,188 ✭✭✭✭jmayo


    seeing as you disagree, what do you see as the reasons?

    El Stuntman you do know you are talking to a Fianna failure apologist ?
    Take your pick of reasons for this whole mess, it is global downturn, it is American subprime, it is the weather, oh and it is people like you talking down the markets :rolleyes:

    PS did you see how that sniveling little sh** Neary hadn't the guts to show up for Dail committee meeting today.

    I am not allowed discuss …



  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    The Volume of AIB shares been traded today is pretty high and the share price has only dropped 5 cent which suggest to me a lot of shares are been bought, maybe I'm reading that wrong?


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    The Volume of AIB shares been traded today is pretty high and the share price has only dropped 5 cent which suggest to me a lot of shares are been bought, maybe I'm reading that wrong?

    that's a 10% drop! :pac:


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  • Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    check out the tax returns prior to Anglo's nationalisation; 'The Exchequer' is already fooked. Why socialise up to 30bn more in losses?
    Are you suggesting that because the 'The Exchequer' is screwed, it's all right to add oil on the fire?

    My take on the present policy is that it is an unattractive one. However, it is also the least unattractive one presently available. To prop up the banks is bad, not to is worse.

    So far, outside of moralizing over the principle of the policy, I've noticed a distinct lack of discussion on the real economic implications it represents, or the opportunity costs of not applying it.


  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    that's a 10% drop! :pac:

    Yes but the same Volume earlier in the week saw a 60% drop :confused:


  • Registered Users, Registered Users 2 Posts: 3,285 ✭✭✭Frankie Lee


    From October 2nd 2008:
    http://www.independent.ie/business/commercial-property/bank-backing-may-also-rescue-foolish-developers-1487168.html
    PROPERTY developers in danger of defaulting on multi-million euro loans will benefit from the Government's €400bn bank guarantee, according to a leading economist.
    Colm McCarthy, of UCD's School of Economics, said the guarantee effectively bails out developers who borrowed large sums for "foolish property projects."
    He said that although the Government package would not directly fund cash-strapped developers, it would give them more leeway to settle their debts or refinance loans -- something they would be unable to do if the banks went into liquidation. "If a bank went bust, the liquidator would have been chasing the developer for the money they owed," he told the Irish Independent.
    "But now they will have banks to deal with instead of liquidators and the banks will be much more amenable to them."
    Mr McCarthy criticised the high concentration of lending in mortgages, the construction sector and property and said there had been a failure of oversight and scrutiny by financial regulators. The Construction Industry Federation (CIF) would not be drawn on Mr McCarthy's comments.
    However, the CIF denied any foreknowledge of the Government plan despite the fact its chief executive Tom Parlon met with Finance Minister Brian Lenihan on Monday.
    "The meeting was purely to discuss our pre-budget submission. We had no idea what was coming," said CIF director of communications Martin Whelan.
    With Irish banks having loaned up to €120bn, around 60pc of all loans, to property developers and builders, some economists warned yesterday that up to €20bn could end up being written off as bad debt.
    According to Fine Gael TD Olivia Mitchell, a risk assessment carried out by an international investment bank on Bank of Ireland and AIB found that half of all loans for commercial development were given to just 40 borrowers.
    The assessment found that 60pc of AIB's total loan book was concentrated in the property sector, either in residential mortgage lending or construction and property lending. In the case of Bank of Ireland, the figure was 70pc.
    A UCD economist, Prof Morgan Kelly, said foreign banks were afraid to lend money to Irish banks because they had too many bad debts from loans to developers and builders.

    I'd be very worried.


  • Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    Are you suggesting that because the 'The Exchequer' is screwed, it's all right to add oil on the fire?

    My take on the present policy is that it is an unattractive one. However, it is also the least unattractive one presently available. To prop up the banks is bad, not to is worse.

    So far, outside of moralizing over the principle of the policy, I've noticed a distinct lack of discussion on the real economic implications it represents, or the opportunity costs of not applying it.

    Ok,

    there is a clear reason to protect the retail bank sector because simply there would be chaos if they collapsed. Lets take that as a given. Ango is not a retail bank.

    There will be no overall macroeconomic effect if Ango collapsed. None. Nada. Zilch. Some property developers would have to negotiate with asset recovery agencies, but thats their problem.

    In fact other banks share price (if you think it matters) of the rest of the Irish banking sector will rise because the market will have actually have confidence that the state will be able to step in to defend them.


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    My take on the present policy is that it is an unattractive one. However, it is also the least unattractive one presently available. To prop up the banks is bad, not to is worse.

    I'm saying prop up the two that are essential to the running of the ecomony and let the rest go bust


  • Registered Users, Registered Users 2 Posts: 2,608 ✭✭✭themont85


    No more talking, meetings or the inability to take any kind of action. This shower are completely incapable, if you think this year is gonna be bad, wait for the next couple. Mass mortgage defaults, credit card debt, no employment, I will be starting a seperate thread on this.

    Its alright folks, LoveDucati2 means business here, the economy is going to be saved.

    This could be like the moment in all the Hollywood movie, one poster decides enough is enough and single handedly comes up with a solution to all our problems with the aid of their keyboard when it seems all hope is lost(with dramatic music obviousely). Give Spielberg a call, we still have that that tax exception for movies don't we?


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  • Registered Users, Registered Users 2 Posts: 6,287 ✭✭✭Talisman


    Apologies on the link - here it is http://www.irishtimes.com/newspaper/opinion/2009/0120/1232059661333.html

    With respect, you are the one taking the minister at face value, yet I am naive? Anglo were well known in banking circles for being, ahem, moody, and their risk rating even in the good times reflected that.

    Read the above article, I would be interested to see what you think.
    According to a source of mine very familiar with what happened at the meeting, extending the liability guarantee to Anglo Irish and Irish Nationwide was strongly opposed by representatives of the Central Bank and the Department of Finance (who reportedly came into the meeting with a draft Bill to rescue only four institutions). However, I am told they were overruled by the Taoiseach and the Minister for Finance, who were supported by the Financial Regulator and the Governor of the Central Bank on the grounds that a sudden liquidation of Anglo’s assets would not be in the national interest.
    Brian Lenihan denies that that happened, however in light of the revelations about the carry on at the IFSRA with regards to Anglo Irish and the concealed director loans then the role of the Financial Regulator would have come under severe scrutiny if the guarantee was to exclude Anglo Irish.


  • Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    Ango is not a retail bank.
    It is. Not it's primary focus, but it is also a retail bank.

    It's main focus in with commercial banking, and there are a fair number of companies, of various sizes, that bank with or have loans with Anglo. Most of these have nothing to do with property development.
    There will be no overall macroeconomic effect if Ango collapsed. None. Nada. Zilch. Some property developers would have to negotiate with asset recovery agencies, but thats their problem.
    Except for those retail customers who have accounts with Anglo. And businesses who have accounts with Anglo. And those who have loans with Anglo. Let's not forget that the collapse of a major bank in Ireland would have an impact on confidence on the Irish banking.

    But if you ignore all that, you're quite right. There will be no overall macroeconomic effect if Anglo collapsed.


  • Registered Users, Registered Users 2 Posts: 6,287 ✭✭✭Talisman


    themont85 wrote: »
    Its alright folks, LoveDucati2 means business here, the economy is going to be saved.

    This could be like the moment in all the Hollywood movie, one poster decides enough is enough and single handedly comes up with a solution to all our problems with the aid of their keyboard when it seems all hope is lost(with dramatic music obviousely). Give Spielberg a call, we still have that that tax exception for movies don't we?
    Interesting that you mention Spielberg, I immediately thought of the scene in Schindler's List where the Nazi's line the Jews up and shoot them with a single bullet. It works on so many levels.


  • Registered Users, Registered Users 2 Posts: 4,929 ✭✭✭Raiser


    Please let them die in abject, miserable shame......but only after prosecuting every last profiteering, crooked, miserable WBanker.....


  • Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    I'm saying prop up the two that are essential to the running of the ecomony and let the rest go bust
    Do you know what the cost and effect of that scenario is against the cost and effect of propping up banks such as Anglo?


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  • Technology & Internet Moderators Posts: 28,830 Mod ✭✭✭✭oscarBravo


    From October 2nd 2008:
    Please attribute that quote, thanks. I can see it's from the Independent, but including a link is only polite.


  • Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    It is. Not it's primary focus, but it is also a retail bank.

    Wrong. Simple as. They are a business bank that provide some high net worth work, but are unambigiously not a retail bank in terms of licence or in terms of what they do.
    It's main focus in with commercial banking, and there are a fair number of companies, of various sizes, that bank with or have loans with Anglo. Most of these have nothing to do with property development.

    Actually most do.
    Except for those retail customers who have accounts with Anglo. And businesses who have accounts with Anglo. And those who have loans with Anglo. Let's not forget that the collapse of a major bank in Ireland would have an impact on confidence on the Irish banking.

    There are no retail customers, but there are commercial ones, but those debts would be sold and deposits protected by law - no net economic effect save that some indebted commercial actors would have to deal with liquidators as opposed to a friendly bank. Thats a political issue, not an economic one.

    I would further argue that Ango collapsing will increase confidence in the retail sector because now the state can actually afford to save Bank and AIB if they need.
    But if you ignore all that, you're quite right. There will be no overall macroeconomic effect if Anglo collapsed.

    Ignore what? You are simply incorrect, so your analysis collapses.


  • Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Do you know what the cost and effect of that scenario is against the cost and effect of propping up banks such as Anglo?

    the cost to the Exchequer of letting Anglo/INBS go bust?

    zero

    please don't now try to confuse the issue by asking what about depositors\businesses etc - they are private entities and I am talking about socialisation of losses.


  • Registered Users, Registered Users 2 Posts: 3,285 ✭✭✭Frankie Lee


    oscarBravo wrote: »
    Please attribute that quote, thanks. I can see it's from the Independent, but including a link is only polite.
    done


  • Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    Wrong. Simple as. They are a business bank that provide some high net worth work, but are unambigiously not a retail bank in terms of licence or in terms of what they do.
    So the retail accounts that people have are imaginary?
    Actually most do.
    Source?
    There are no retail customers, but there are commercial ones, but those debts would be sold and deposits protected by law - no net economic effect save that some indebted commercial actors would have to deal with liquidators as opposed to a friendly bank. Thats a political issue, not an economic one.
    There are retail customers. Secondly, up until recently those deposits were not protected by anything. Thirdly, what is the cost of guaranteeing those deposits, versus nationalization?
    I would further argue that Ango collapsing will increase confidence in the retail sector because now the state can actually afford to save Bank and AIB if they need.
    Or not. That's the thing about confidence.
    Ignore what? You are simply incorrect, so your analysis collapses.
    The only fact you've contradicted is to do with their retail status. And in that you are incorrect.
    the cost to the Exchequer of letting Anglo/INBS go bust?

    zero

    please don't now try to confuse the issue by asking what about depositors\businesses etc - they are private entities and I am talking about socialisation of losses.
    No I'm asking what the economic cost, and it's inevitable cost to the Exchequer would be. You say zero. I see.


  • Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    So the retail accounts that people have are imaginary?

    Source?

    There are retail customers. Secondly, up until recently those deposits were not protected by anything. Thirdly, what is the cost of guaranteeing those deposits, versus nationalization?

    Or not. That's the thing about confidence.

    The only fact you've contradicted is to do with their retail status. And in that you are incorrect.

    No I'm asking what the economic cost, and it's inevitable cost to the Exchequer would be. You say zero. I see.


    Give it up Corinthian, you are wrong.

    http://howbankingworks.ie/index.php?option=com_content&task=view&id=10&Itemid=19


    There are 6 retail banks in Ireland:

    Corporate website - Retail Ireland
    Profiles of this bank
    Wikipedia profile

    (1) AIB plc
    Intertrade profile of AIB
    AIB

    (2) Bank of Ireland

    Bank of Ireland

    (3) Bank of Scotland (Ireland) Ltd aka Halifax

    Halifax(Ireland)

    (4) National Irish Bank Ltd

    National Irish Bank Ltd

    (5) permanent TSB

    permanent TSB

    (6) Ulster Bank (Ireland) Ltd
    Intertrade profile of Ulster Bank
    Ulster Bank (Ireland) Ltd


    and it goes on to say

    Of course, the banks above are not the only banks offering services in the retail market. No list would be complete without mentioning Anglo-Irish Bank which mainly offers services to the Business market, but offers attractive rates for large deposits from individuals.

    That is NOT retail banking. They are actually Treasury accounts.

    With that basic flaw in your arguement, what is the point of arguing the rest?


  • Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    Do you know what the cost and effect of that scenario is against the cost and effect of propping up banks such as Anglo?

    I assume you do, please provide the figures.


  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    the cost to the Exchequer of letting Anglo/INBS go bust?

    zero

    please don't now try to confuse the issue by asking what about depositors\businesses etc - they are private entities and I am talking about socialisation of losses.

    These figures are guesses and its a very basic analysis but lets say Anglo had Assets of 100 billion on their Balance Sheet

    Now lets say those assets in todays climate are worth 60 Billion

    Deposits at the bank are 80 billion

    So under the Guarantee scheme the Government i.e. the Exchequer is exposed to a loss of 20 billion?

    Is that not possible?


  • Registered Users, Registered Users 2 Posts: 15,956 ✭✭✭✭Villain


    Oh and the volume of AIB shares today is huge and they are up 23% on the day!


  • Registered Users, Registered Users 2 Posts: 43,311 ✭✭✭✭K-9


    Villain wrote: »
    These figures are guesses and its a very basic analysis but lets say Anglo had Assets of 100 billion on their Balance Sheet

    Now lets say those assets in todays climate are worth 60 Billion

    Deposits at the bank are 80 billion

    So under the Guarantee scheme the Government i.e. the Exchequer is exposed to a loss of 20 billion?

    Is that not possible?

    I can't see the zero figure either.

    Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.



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