Had Anglo failed...

j1smithy

...what would have happened? I'm no economist so would someone please enlighten me? Some have suggested a domino effect that would have taken down our entire banking system, what would the mechanisms have been for this to happen. Other posters here suggest that the bank should have been let go to the wall, therefore I would like them to describe how they think the failure of one bank could have been isolated from the rest of the system.

As I said, I'm no economist, but would like to hear peoples thoughts on this.

EastWallGirl

Any bank draft i saw for Anglo Irish was drawn on AIB bank, so there main holdings must of been with AIB which is why AIB was so jumpy when Anglo got into trouble.

As these directos were ignoring the law (ie Irish Nationwide lending to Anglo Irish to fix their balance sheet holes in time for the audit and not declaring it) and theses bank directos were quite chummy then I imagined they all had fingers in each others pies, so in that way Anglo Irish would have had ripple effects had it been allowed to fall.

That being said Anglo Irish was not a systemic bank in the true sense of the world, only to about 50 builders and some other banks.

So personally I am divided, I think once all the tentacles are unraveled it will appear that Anglo was overly influential.

For me not enough people have fallen on their sword and those that have done have been replaced internally. I think there will be alot of secrets of those being criminally negligent will never see the light of day.

It though would of been quite possible to let Anglo Irish fall, give some financial assistance to BOI and AIB and perhaps set up a new bank or allow co-operative banking to support business and citizens that still have plans and an ability to function that may need funds for their own growth.

Bob Z

What ever happened to that so-called golden circle? Hadnt they something to do with that bank? it seemed to be a big story and then it just dissapeared?

EastWallGirl

It may not of been the bank saving deal we thought it was:

http://www.independent.ie/national-news/golden-circle---8364300m-loan--will-be-pursued-1644971.html


The Golden Circle will be looked after by NAMA.

The Golden Circle are their big borrowers who quite literally encapsulate the saying 'If you owe the bank €1 million it is your problem, if you owe them €100 million it is the banks problem.'

If you owe the banks €90 billion, it is the tax payers problem.

jmayo

EastWallGirl wrote: »

Any bank draft i saw for Anglo Irish was drawn on AIB bank, so there main holdings must of been with AIB which is why AIB was so jumpy when Anglo got into trouble.

As these directos were ignoring the law (ie Irish Nationwide lending to Anglo Irish to fix their balance sheet holes in time for the audit and not declaring it) and theses bank directos were quite chummy then I imagined they all had fingers in each others pies, so in that way Anglo Irish would have had ripple effects had it been allowed to fall.


For me not enough people have fallen on their sword and those that have done have been replaced internally. I think there will be alot of secrets of those being criminally negligent will never see the light of day.

Irish Nationwide were the ones moving the Seanie Scumbag Fitzs directors loans, so that it would not appear in the auditied accounts. Thus no large directors loans to explain to the investors.
IL&P was the one that appeared to offer the service of giving them a large multi billion deposit so that their deposit base appeared much better than it actually was.
They then went to the markets stating how much money they had on deposit neglecting the fact that they had a "borrow a 6 billion deposit for a week scheme" in place.
That in some countries would be seen as misleading the markets and the financial regulatory authoriities, but in Ireland it is seen as protecting the the system.
It was noticable how the markets knew better and didn't bite, something the government and IFRSA should have spotted.

It should have been allowed fail, even if it also took down it's developer friends, it's insurance owning cement making friends and politican friends.

Then the government should have moved immediately to pump a few billion into the other major banks to assure depositors and investors alike.
That way we would not have had to buy 60 odd billion of toxic loans that we will be lucky to ever get half of back.

IMHO the best way to sum up the event is to liken it to tying the lifeboat to the stern of the sinking ship.

As regards your reference to not enough changes, does our minister of finance not have a problem with putting the man who helped sink BOI in charge of it's rescue ?

http://www.irishtimes.com/newspaper/finance/2009/0226/1224241834873.html

What an incestous little backwater we are. :rolleyes:

Anyone see any figures on how much Anglo will cost us?

Fat_Fingers

Deleted User wrote: »

Anyone see any figures on how much Anglo will cost us?

Lol, yeah righ! FF will make sure "little people" never see how much we will have to pay for that mess.

AlekSmart

For me not enough people have fallen on their sword and those that have done have been replaced internally. I think there will be alot of secrets of those being criminally negligent will never see the light of day.

That`s for sure EastWallGirl.

The 5 year buffer zone before any review of NAMA`s performance coupled with the absolute resistance of Fianna Fáil to bring any form of criminal charges to bear against the élite will make certain of that.

The wee bit of breathing space given to NIB before a few Gards could be despatched to Stephens Green ensured that the only hot stuff they could find was the outer casings of the Shredders.....Whats the bets on a LOT of NIB documentation simple becoming

unavailable

to any investigation that does manage to get going....:(

irish_bob

j1smithy wrote: »

...what would have happened? I'm no economist so would someone please enlighten me? Some have suggested a domino effect that would have taken down our entire banking system, what would the mechanisms have been for this to happen. Other posters here suggest that the bank should have been let go to the wall, therefore I would like them to describe how they think the failure of one bank could have been isolated from the rest of the system.

As I said, I'm no economist, but would like to hear peoples thoughts on this.

i wont name names but i know for a fact that if anglo had failed ,a certain business man who employs many many people would have gone broke , this info will go public eventually

stepbar

irish_bob wrote: »

i wont name names but i know for a fact that if anglo had failed ,a certain business man who employs many many people would have gone broke , this info will go public eventually

You "know" a certain business man would have gone broke eh? :rolleyes: The business man who has a 15% shareholding in Anglo eh? :rolleyes:

Stop talking through your hat because if you knew anything, you'd know that you are just so wrong.

irish_bob

stepbar wrote: »

You "know" a certain business man would have gone broke eh? :rolleyes: The business man who has a 15% shareholding in Anglo eh? :rolleyes:

Stop talking through your hat because if you knew anything, you'd know that you are just so wrong.

i know from someone who is high up in a certain bank , its not anglo but thier all the same litter of pigs as they say round theese parts

stepbar

irish_bob wrote: »

i know from someone who is high up in a certain bank , its not anglo but thier all the same litter of pigs as they say round theese parts

So now it's not Anglo :rolleyes: Sweet jeasus christ, I give up :rolleyes:

Fat_Fingers

When you have a half of the "businessmen" going bust after the first crisis it just shows you they are no businessmen but well connected chancers who took the money and run. Its all Bertie's school of high economics from Galway tent college. Taxpayers should not be propping up failed private business. Sean, Liam and the others should be allowed to fall.

irish_bob

stepbar wrote: »

So now it's not Anglo :rolleyes: Sweet jeasus christ, I give up :rolleyes:

the person i heard this from doesnt work for anglo , they work for another bank as my post makes clear

Bob Z

stepbar wrote: »

So now it's not Anglo :rolleyes: Sweet jeasus christ, I give up :rolleyes:

Your getting very worked up. This is just a stranger on the internet what does it matter?

EastWallGirl

Just as people kept re mortgaging their houses 'cause they are worth more and god dam it like the Loreal ad said I am worth it' to buy another new car (4WD), another holiday another investment flat in Albania (it will rocket when they join the EU) to add to the portfolio of investments in the Czech Republic, Poland and Bulgaria.*

Businesses were doing the same, revaluing themselves and borrowing money to add expansion which did not exist or could not be verified. I am positve the sight of a big bill form some consultant must give business men some strange sexual satisfaction, because that is the only explanation for why these poeple got paid so much. Never have there been so many people in business who did not have a notion.

I mean I saw some stupid stuff in my private life and work, but I did not think it was endemic.

I am not suprised that there would be one or two big companies holding on by their teeth. If you look carefully at Dublin City Centre, you can see the bigger chains rationalising, there are empty shops on Grafton St, Henry St and Dundrum, Clare Hall is almost empty, all the new shiny offices near me are empty. Companies are holding onto cash not paying each other (Ireland has one of the biggest o/s accounts in days in the EU) and the banks are not doing overdrafts.

*If people bought those lovely new fiat Cinquecentos I may of forgiven them.

Salvelinus

Weren't the auditors at best hopeless and at worse crimimally negligent?

jmayo

EastWallGirl wrote: »

Just as people kept re mortgaging their houses 'cause they are worth more and god dam it like the Loreal ad said I am worth it' to buy another new car (4WD), another holiday another investment flat in Albania (it will rocket when they join the EU) to add to the portfolio of investments in the Czech Republic, Poland and Bulgaria.*
...
I mean I saw some stupid stuff in my private life and work, but I did not think it was endemic.

I am not suprised that there would be one or two big companies holding on by their teeth. If you look carefully at Dublin City Centre, you can see the bigger chains rationalising, there are empty shops on Grafton St, Henry St and Dundrum, Clare Hall is almost empty, all the new shiny offices near me are empty. Companies are holding onto cash not paying each other (Ireland has one of the biggest o/s accounts in days in the EU) and the banks are not doing overdrafts.

*If people bought those lovely new fiat Cinquecentos I may of forgiven them.

Ah don't worry we will all be back driving Toyotas, Fords and VWs like the bad old 80s.
Hell Lada might even make a comeback.

Even towards the end of the boom 2006/2007 it was noticable that there was lots of empty office space and poor returns, but they continued rolling out retail space.
Anybody sensible or pragmatic would have forecast a burst, but what is totally surprising is how exposed the major banks were to the whole bubble.
Anglo wasn't a complete surprise, but look at AIB and even BOI.
They chased seanie ****z and fingers down the same road.

Dob74

Anglo has gone bust and now it's the taxpayers problem.
FF has appointed the likes of Alan Dukes to the board. He bailed out AIB in ICI scandal, so I think it says alot about what the gov is going to do with Anglo.
The taxpayer is going to get screwed.

jmayo

Dob74 wrote: »

Anglo has gone bust and now it's the taxpayers problem.
FF has appointed the likes of Alan Dukes to the board. He bailed out AIB in ICI scandal, so I think it says alot about what the gov is going to do with Anglo.
The taxpayer is going to get screwed.

You are bloody lucky that it was Alan Dukes and not some other connected guy. At least the guy has always appeared to have a few scruples.

Remember of all Irish politicians Dukes put this country first and his career second when he agreed the Tallaght strategy that allowed Haughey implement the changes in 1987 that eventually led to the Celtic Tiger economy.
And I don't mean the building bubble I mean the technology compnaies in the 90s.
That strategy meant he lost the leadership of the FG party.

Yes the government he was a minister in bailed out AIB from the ICI mess and I don't agree with the way it was done, because the Irish taxpayer did not get anything out of it. They should have screwed AIB then and there.

AIB have never learnt from their messes, they have always been at the forefront of dopdgy practices (non resident accounts, Goodbodys) and I sincerly hope that in ten years time they no longer exist as a separate bank.