3bn injection for Anglo

twanda

Hi
Can someone on this forum explain to me why the gvnt is pouring 3bn (and a further planned 1bn), into Anglo Irish Bank? I understood that Anglo recently wrote off some huge debts, which the ordinary Joe Soap will have to foot the bill for -- or have I got things a*seways? Am just wondering if the bank should be saved or not?
Confused...

Nody

In short is a company made up of two things, assets (+) and liabilities (-). Both should be equal so if you reduce one side (asset write down of value) you have a imbalance (also known as bankruptcy if long enough basically) by having more liabilities (loans to other people, debt etc.) that you need to correct. In this case by adding cash to the asset side to bring it back in balance again.

Sponge Bob

Anglo and its customers provide most of Fianna Fáils funds .

SLUSK

Anglo Irish Bank should not have been saved instead it should have gone into bankruptcy and the shareholders left without anything. If we are supposed to have a system with private profits, than sure as hell the losses should be private as well. This disgustingly corrupt ****hole of a society we live in has a system of private profits and socialized losses.

Senna

SLUSK wrote: »

it should have gone into bankruptcy and the shareholders left without anything

I dont think the shareholders got anything anyway.
People with money on deposit would have lost it, but most people banking with anglo weren't average people. How many average joe's would have been effected? not many?

Moriarty

I think the question some people miss is whether the collapse of a major bank in this country could have had deeper and more widespread costs to the country. I'm far from an expert, but..

- a run on the other banks in the state. Once that starts, it could be impossible to stop before there's chaos across every sector of personal and business finance. What happens when one of the big two has a liquidity crisis and suddenly John Doe's ESB direct debits stop working, or Acme Ltd stops receiving payments?

- a large amount of assests tied up in courts for possibly years in legal challenges over who gets what, further removing cash from an economy already starved of it.

- Presuming Anglo was allowed to fail, how much would the state have been exposed to in deposit guarantee charges?


Anyone any ideas on how plausible the above are?

gurramok

And there me thinking they could not find 9 million quid for the Crumlin kids hospital but found €3bn for a bank..

JonathanAnon

Sponge Bob wrote: »

Anglo and its customers provide most of Fianna Fáils funds .

I dont think you can say something like that without including citation. I'm not saying you're wrong but I dont think its enough to making a sweeping statement like that without backing up.

I thought AIB was Charlie's bank, at what stage did FF change their bank of preference. Sure we all know Bertie didn have a bank account.

ejmaztec

Senna wrote: »

I dont think the shareholders got anything anyway.
People with money on deposit would have lost it, but most people banking with anglo weren't average people. How many average joe's would have been effected? not many?

Wasn't there a mass out-pouring of deposit funds between the time that a "problem" was announced and the time that the government decided to act? I also seem to remember that some of those with deposits were linked indirectly to those in the Anglo-Irish loan book.

NewDubliner

Isn't it curious how the 3bn injection coincided with a steady flow of leaks from An Bord Snip?

Small Change

NewDubliner wrote: »

Isn't it curious how the 3bn injection coincided with a steady flow of leaks from An Bord Snip?

What do you mean?...I don't see the connection

Sponge Bob

JonathanAnon wrote: »

I dont think you can say something like that without including citation. I'm not saying you're wrong but I dont think its enough to making a sweeping statement like that without backing up.

Fianna Fáil , in the last 10 years , was largely funded by a coterie of property developers who were themselves largely funded by Anglo Irish .

The Galway Races Tent was a who is who of FF Ministers and Anglo Customers every year . Even Anglo EXECUTIVES betimes .

Anglo Irish was only of systemic importance to Fianna Fáil and to their Builder buddies. It should have been allowed to implode and the state should have looked at supporting banks of systemic importance such as AIB and BoI .

Too late now , these parasites have their hooks well into the public purse

NewDubliner

Small Change wrote: »

What do you mean?...I don't see the connection

News management, distract the public.