New Budget - New Banks?

Smcgie

Whats going to happen wit the banks in todays budget.. As I am a company director and find it hard to get loans for cashflow management and I am a shareholder in BOI its going to be very interesting for me.

What do others think?

oscarBravo

Nothing. Actually, y'know, doing something isn't this government's style. They've announced that the banks are open for business, and that should be enough, right?

knipex

I would bet on an announcement regarding a toxic bank.

If they buy the debt off the banks at current property prices (ie giving them the current value of collateral placed against these debts) then they should be taken out and shot.

Commercial property prices are still way overinflated as is the price of development land. The max they should give is 50% of current value otherwise its just bailing out the banks. The banks need to share a substantial portion of the pain and the exchequer needs to ensure that the taxpayer gets a reasonable (break even or even a profit) return on their investment.

steof1984

I reckon the toxic bank will be introduced and will be a way of propping up the banks and builders.

It's got to be borderline illegal if they spend tax payers money to buy the bad debts at todays market prices when everyone in the country knows the assets will continue to decline in value. If not illegal its highly immoral. Using our money to prop up their builder buddies.

drunkmonkey

if "we" the government buy all the bad debts, are the going to pay current market rates for the property?
seems like a bad deal for the tax payer as prices have yet to bottom out...

Sparks

The thing with "borderline illegal" is that you're talking about the people who draw the borders in the first place...

Sully

There is a lot of talk about this toxic bank, and if I recall correctly FG suggested this a while back. Its been dismissed a few times by the government but someone recently suggested it (other then FG) that its something worth looking at. From hearing them on Q&A last night, this toxic bank is something that looks like will be announced today.

Smcgie

I agree, it won't be long now until we hear. Hopefully we can take our country back towards a fairer economy

franklyshocked

oscarBravo wrote: »

Nothing. Actually, y'know, doing something isn't this government's style. They've announced that the banks are open for business, and that should be enough, right?

I think you'll find the governments style is to get told the right thing to do, wait two years to act and then call their late response "leadership"

Capt'n Midnight

steof1984 wrote:

If not illegal its highly immoral. Using our money to prop up their builder buddies.

They can't prop them up directly so they will have to use an indirect approach.

Here's hoping they reacted to the public anger at the light touch those buddies got in the last budget.

Back in '83 PAYE generated 80% of all revenue. Add to this the old reliables and you see how inequitable things were then.
This shows that PAYE sector can take a lot of pain
But unless other sectors take the same hit it will not go down well.

A rising tide lifts all boats, but the celtic tiger didn't, so it's only fair that those who benefited most should pay back most.


Strongly agree that any assets picked up by toxic bank should be at true market value and not book value unless there is some major compensation involved for the taxpayer.

Villain

The recent rise in AIB and BOI shares suggests traders have wind of something, I would bet on a bad asset managment company been setup to buy the debts off the banks and I'd expect bank shares to rally in the coming weeks

jimmmy

steof1984 wrote: »

Using our money to prop up their builder buddies.

The "builder buddies" have lost out already because they have lost whatever of their own money they have put in to buying land / property , through negative equity. I know people who has assets of a few million a few years ago who are penniless now

Gu3rr1lla

So if more bad asset companies come in and buy the debts off banks we will see a lot more homeless people as these companies will want to profit off the debt they bought or at least want their money back?

Idu

I might be wrong but the point of the bad asset bank being managed by the government would be that they wouldnt actively be seeking the return on the assets in the same manner that the banks would

Villain

Gu3rr1lla wrote: »

So if more bad asset companies come in and buy the debts off banks we will see a lot more homeless people as these companies will want to profit off the debt they bought or at least want their money back?

They won't be buying individual home debts but the large developer debts on sites that haven't been started or completed, but if people can't afford the home they live in then yes the banks will eventually have to reprocess homes but that won't happen in a hurry as a large number of repocessions on a daily basis would devalue the assets the loans are on and thus devalue the loans.

Villain

Villain wrote: »

The recent rise in AIB and BOI shares suggests traders have wind of something, I would bet on a bad asset managment company been setup to buy the debts off the banks and I'd expect bank shares to rally in the coming weeks

Sounds like what they are doing?

PeteHeat

Villain wrote: »

They won't be buying individual home debts but the large developer debts on sites that haven't been started or completed, but if people can't afford the home they live in then yes the banks will eventually have to reprocess homes but that won't happen in a hurry as a large number of repocessions on a daily basis would devalue the assets the loans are on and thus devalue the loans.

Hi Villian,

I have a contact in an Emergency Housing Department, as much as you and I like to think that the banks are not in a hurry to take posession of private homes it is happening on a wide scale.

While AIB and BOI have the 12 month grace period in place the banks we call Sub Prime lenders are actively seeking and gaining posession of private homes.

In one case I know of a couple who both received telephone calls on a daily basis after they missed a portion of the second payment, they had not fully defaulted but paid some 70% of the payment due.

After month 2 the lender refused any further payments unless the full outstanding balance along with the next payment was made.

A couple with 4 children, one job lost what do they do, pay the mortgage or eat ?

They did eat while the lender sought and got posession through our Courts, they did not borrow 100% actual borrowing was in the order of 60%.

I honestly believe this Government should be Charged with the Crime of Treason Against the State, for ten years they allowed the economy to be steered / managed by the greed of a banking system that was in fact eating itself in the process.

What of the 700 million lost across the border helped on by a VAT rate that is making our neighbouring economy appear more competitive ?

CamperMan

jimmmy wrote: »

The "builder buddies" have lost out already because they have lost whatever of their own money they have put in to buying land / property , through negative equity. I know people who has assets of a few million a few years ago who are penniless now

most of the money that went into these big developments was the banks money