AIB set to announce mortgage rates up by .5%

spockety

Breaking news...

Thanos

Well we knew it was on its way, question is now that they have moved how long before the others move??????

Amhran Nua

Thanos wrote: »

Well we knew it was on its way, question is now that they have moved how long before the others move??????

And how far and how fast.

mathie

Well I certainly hope everyone took the nice Estate Agents advice and bought up a few properties before the interest rate hikes started.
:rolleyes:

Tender Hoop

i fixed into a 5 year rate of 3.86% last month. Glad I did.

Idbatterim

people might be pi**ed off at this seeing as how the taxpayer is bailing them out! but what do you expect, their is a total conflict of interest!

quozl

Idbatterim wrote: »

people might be pi**ed off at this seeing as how the taxpayer is bailing them out! but what do you expect, their is a total conflict of interest!

I'm a tax-payer and I'm not annoyed.

It costs AIB more to borrow the money they lend to people than they're currently charging those people.

Significantly more.

So if AIB raise their interest rates they will be slightly less loss making, and tax-payers will have to prop them up that little bit less.

Sounds like a sensible business decision to be honest.

Highly Salami

quozl wrote: »

I'm a tax-payer and I'm not annoyed.

Thats a first!
(sorry if post is a bit After Hours-ey)

quozl

Highly Salami wrote: »

Thats a first!
(sorry if post is a bit After Hours-ey)

True, I should have said 'over this one specific issue'.

TBH, AIB should have raised their rates previously. I'm sure they didn't because they were waiting for NAMA to be copper-fastened before they did anything too embarassing to the government in public.

AARRRGH

quozl wrote: »

I'm a tax-payer and I'm not annoyed.

It costs AIB more to borrow the money they lend to people than they're currently charging those people.

Significantly more.

So if AIB raise their interest rates they will be slightly less loss making, and tax-payers will have to prop them up that little bit less.

Sounds like a sensible business decision to be honest.

I agree.

BobbyD10

It's only a matter of time before the other banks follow.

My question is when will AIB raise the rates again by a further 0.50%, as their rates are still relatively low.

AARRRGH

BobbyD10 wrote: »

It's only a matter of time before the other banks follow.

My question is when will AIB raise the rates again by a further 0.50%, as their rates are still relatively low.

Sooner rather than later I hope.

Forcing everyone to subsidise mortgage holders' below cost mortgages is wrong.

The_Conductor

Hmmm- this will well and truly torpedo our negative rate of inflation- alongside consumer confidence....... I'm on a tracker, thank god, I think there is a whole lot of hurt coming down the road for all of us........

Agent J

The timing is very suspect.

I agree it had to be done but it had been telegraphed for the Summer.

Coyote

Agent J wrote: »

The timing is very suspect.

I agree it had to be done but it had been telegraphed for the Summer.

The timing is very very suspect, AIB have been in talk with the government all weekend about how much capitol they will need and how long they will have to find the cash to offset loses and how much the haircut on NAMA loans will be along with how much of AIB the government will end up owning. I would guess this was a shot across the bow of the government to say don't try to take too much or they will just set there rates high to make more cash and what can people do.
the low interest rates have helped a lot of people who lost jobs to stay in there homes, and given people who got pay cuts more money to spend on other stuff. if the banks raised rates very high it would help them cover there loses but would be very bad for the economy and increase the chances of strikes as people would not have enough to live on.

The_Conductor

The fact that low interest rates have helped people with their mortgage payments- is wholly irrelevant to the argument. The original proposal was for an increase in loan margins almost a year ago- but for political reasons this was put off to Q1-Q2 2010. This is what was signalled to the financial markets. If the announcement is early- its only by a few weeks, its exactly what they said they were doing- and they are only following the steps of ILP and some smaller lenders who managed to get off the blocks last autumn.........

Its going to be incredibly tough across the board for everyone- but any increase in Irish lending margins- is only bringing them to international normal lending levels- and was always going to be necessary if the lending institutions wanted any hope whatsoever of raising institutional funding. AIB and BOI's last bond raising exercise only got off at rates of 5.8 and 5.1% respectively (AIB being seen by investors as being in far worse trouble than BOI).

Whatever about this .5% rise- the hurt will really begin to bite when the ECB starts to increase its base rates- and it has already signalled that inflation is heading in a worrying direction (no doubt the recent oil price rises play a significant role here).

S.

Coyote

I don't think that it's irrelevant that low interest rates have helped people and the economy. I'm not saying that the rates did not need to go up. everyone knew that it was going to happen you can't borrow money at 5% and lend at 3.5%. but I still think that it was a warring to the government that if they force a very short time for getting Irish banks reserve up to 7-8% making AIB need more government cash injected and having to give a larger % to the government. if they can't make the 7-8% in short time but could in a longer time period then AIB might just put rates up another 1.5-2% so needing less government cash but doing damage to the economy. the timing is just odd they have been in talks over the weekend and AIB was not happy with what the government wanted to do and the day before the government said what the plans were AIB raise the rates.

The_Conductor

I accept what you're saying.
The fact of the matter is the Irish banks who availed of the government guarantee- kept their rates at artificially low levels. The government guarantee in turn- was priced at an artificially low level- to offset these artificially low rates being offered to consumers. The new government guarantee- is priced at market rates (at the insistence of the EU Commission- in order to satisfy state aid rules). This is in keeping with the schemes approved for other EU countries. The margins on loans in other EU countries is at levels at least 1.5-2% above those on Irish loans (which is partially why RBS, Rabo and some other lenders are withdrawing from the Irish market- they can't compete with the Irish rates).

So- in addition to subsidising Irish loans with a cutprice loan guarantee- the banks have also been borrowing money at between 5.1 and 5.8% and relending at 2.6-2.8%- something very obviously had to give- the sums simply didn't add up.

ILP got out the door with its increase in lending rates last autumn- and it in turn is one of the only lenders not on state support at the moment (though it has a hole of between 600-700m in its finances).

Bank of Ireland, AIB et al- have been subsidising the Irish economy for the last 2 years- however they have been forced by the EU Commission to produce viable business plans- in exchange for the Commission agreeing to NAMA and the bank refinancing schemes. Part of their viability plans- as they are businesses at the end of the day- details how they plan to return to profitability. They cannot return to profitability if they are loosing between 2.1 and 2.7% on every loan they put out the door.

AIBs business plan is with the Commission at the moment- and does chart a 1.5% increase in lending margins (aside from any other increases) to bring it to international normal levels- and also to make it more attractive to institutional investors- so it can raise money privately and not rely solely on taxpayer money. The .5% rise this morning is simply phase 1. The June and September rises, will also go ahead- irrespective of NAMA etc- its part of the refinancing deal. The government have been aware of this since the business plan was submitted to Brussels- so its pretty rich of them to act all innocent all of a sudden........

spockety

This only affects 10% of AIB mortgage holders. They have 60% on trackers and 30% on fixed!

Until the ECB start raising rates there is nothing they can do to bleed cash out of their tracker holders, unfortunately for the taxpayer.

stantheman8

Interesting time to re-start this thread following today's announcement of another 0.5% rate increase.

For those who are not p1ssed off with the banks - tell me again why considering it was their outright greed and mis-management that got us into this situation?? :mad:

The_Conductor

stantheman8 wrote: »

Interesting time to re-start this thread following today's announcement of another 0.5% rate increase.

For those who are not p1ssed off with the banks - tell me again why considering it was their outright greed and mis-management that got us into this situation?? :mad:

To be perfectly honest with you- it wasn't outright greed and mismanagement on the part of the banks- it was the lack of regulation and the encouragement of risk taking by the regulator and government- who saw property related taxes as the way for them to have their cake and eat it......

Anglo Irish was throwing money out the door- AIB and Bank of Ireland were in fact exercising relative prudence- however they couldn't compete with the upstart Anglo- and the regulator certainly wasn't going to throw a spanner in the works- so it was a case of join them, or commit hari kari on the stock exchange.

Thankgod we have a financial regulator now who is willing to knock a few heads together- but its about 10 years too late.......

bobbysands81

smccarrick wrote: »

To be perfectly honest with you- it wasn't outright greed and mismanagement on the part of the banks- it was the lack of regulation and the encouragement of risk taking by the regulator and government- who saw property related taxes as the way for them to have their cake and eat it......

Anglo Irish was throwing money out the door- AIB and Bank of Ireland were in fact exercising relative prudence- however they couldn't compete with the upstart Anglo- and the regulator certainly wasn't going to throw a spanner in the works- so it was a case of join them, or commit hari kari on the stock exchange.

Thankgod we have a financial regulator now who is willing to knock a few heads together- but its about 10 years too late.......

Of course it was the greed of the banks that got us where we are. Yes regulation should have been better but nobody but the banks made the banks act the way they did. They need to take responsibility for their actions.

Someone else on this thread said that only 10% of AIBs mortgage customers are variable and that 60% are tracker and 30% are fixed. So the bank are bleeding the 10% dry to make up for losses from the other 90%, dress it up any way you like but that sounds like bad management to me.

I've taken a 15% wage cut part of which is going to the countless billions that the taxpayer of this country is being forced to shell out to the banks.

In order to pay for these countless billions being pumped in to keep the banks afloat I've had to take a triple whammy. My wages are down, the tax I pay is up, and the mortgage I pay has gone through the roof.

What p1sses me off unbelievably is that the increases are going up from close of business tomorrow so I am being given no fcukin time at all by AIB to come up with an extra €150 this month and that's €150 I just don't have. Why not be a bit fair about these things and give people time to react to the increases???


EDIT: - I forgot to add that the banks played the Govt like an old fiddle when it came to honest declarations about NAMA, the banks seem to have lied through their teeth to the Govt who utterly fell for their lies whilst the taxpayers, mortgage holders and workers/unemployed pick up the tab.

Bullseye1

It looks like the poor people on variable are making up for the loses trackers. Its unrealistic to keep rising variable rates in this economy and expect people not to default.

Treehouse72

Bullseye1 wrote: »

It looks like the poor people on variable are making up for the loses trackers.

That strikes me as the case too - the 40% on (rising) SVR's are in effect subsidising the 60% on (static) trackers. This seems an arbitrary and unfair sharing of mortgage holders' collective burden. They all have comparable debts and yet a large minority are paying for the shared mistakes of the collective. That's unjust. If I had an SVR mortgage and my neighbour had the same mortgage on a tracker, I would feel very, very sore about it.

Cavehill Red

Treehouse72 wrote: »

That strikes me as the case too - the 40% on (rising) SVR's are in effect subsidising the 60% on (static) trackers. This seems an arbitrary and unfair sharing of mortgage holders' collective burden. They all have comparable debts and yet a large minority are paying for the shared mistakes of the collective. That's unjust. If I had an SVR mortgage and my neighbour had the same mortgage on a tracker, I would feel very, very sore about it.

Did you not have the option to take out a tracker when you drew down your mortgage? Or did you instead opt for the SVR because at that time it was cheaper than a tracker, which is what the majority of SVR holders did?
If that was the case, you're not paying for any mistakes of tracker mortgage holders. They didn't make a mistake. You're paying for your own mistake of choosing a mortgage option that now doesn't suit you.

Treehouse72

Cavehill Red wrote: »

Did you not have the option to take out a tracker when you drew down your mortgage? Or did you instead opt for the SVR because at that time it was cheaper than a tracker, which is what the majority of SVR holders did?
If that was the case, you're not paying for any mistakes of tracker mortgage holders. They didn't make a mistake. You're paying for your own mistake of choosing a mortgage option that now doesn't suit you.

My mortgage is the best kind of mortgage to have at the moment. It's called rent.

Cavehill Red

Treehouse72 wrote: »

My mortgage is the best kind of mortgage to have at the moment. It's called rent.

Very good option indeed in the current economic climate and market!
I suppose the point I was making (and I say this being in full agreement that everyone in Government and the top echelons of the banks ought to be jailed for what they've done) was that when people drew down their mortgages, be they tracker, SVR, endowment or whatever, they had options to choose from and picked the one they thought suited them best.
For plenty of people, buyer's regret is now kicking in. But it strikes me that when it comes to making a decision about accruing debt for decades or longer, probably the biggest single purchase you're liable to make, surely you do your homework?
It's frankly ridiculous to blame tracker holders for the woes of SVR holders facing payment hikes. The people to blame are the bank officials who oversaw the collapse of their liquidity through preposterous lending practices, largely to a golden circle of individuals who have accrued truly spectacular debts that will never be repaid (while still retaining their mansions and sports cars, of course!)
This is another fake row like the public v private sector row, or the taxpayer v benefits recipients argument.
The people to blame are the bankers and their facilitators in government.

amacca

bobbysands81 wrote: »

Of course it was the greed of the banks that got us where we are. Yes regulation should have been better but nobody but the banks made the banks act the way they did. They need to take responsibility for their actions.

Have to disagree with you....I've been listening to a constant drone for the past few months, it goes a little something like this...the banks the banks the banks......I feel like I'm at Christmas panto and the banks are the villains...they don't need to take responsibility for their actions they need to be put on a sound footing so they are viable again and then they need to be watched/regulated properly so they are forced to make prudent lending decisions etc to ensure this sort of situation never arises again, they need to be made take responsibility for their actions and consequences need to be applied if and when they don't + our society needs to find a way to drastically reduce the effects of cronieism in areas so vitally important to the state as this (at least for a relatively long period until people inevitably forget the consequences of a bubble and lose the run of themselves with some new craze....suppose its unrealistic to expect people to act sensibly forever)

so many posters refer to the banks as if each of them was a single person that are somehow personally responsible for their actions.....they simply are not....they are a for profit organization (much more powerful and harder to control than an individual) that will always act in their own greedy best interests, to expect anything else is unrealistic, they are not responsible for their greed, its the only reason they exist (at least in their own frame of reference it is.....obviously those outside the bank can see other reasons for them to exist such as current accounts/money transfer/savings/jobs/startup capital/business lending etc)

...anyway to echo what I believe to be the main thrusts of smccaricks post if they are not properly regulated they will not function properly....what happened at AIB and BOI (to a lesser extent it seems) happened because Anglo (and lets not forget Irish Nationwide) pursued a ahem *aggressive* lending policy which saw the size of these banks ballooning rapidly in size and taking up market share...this led to AIB/BOI jumping in closer to the end of the madness because their market was being snatched from under their noses....if you cant beat them join them (no matter how flawed their policies were) a sort of keeping up with the jones - it seems to be working for seanie fitz et al we cant afford to miss the boat here goggins says young sheehy


Its disgusting.....its revolting....its astounding Anglo and Irish nationwide were allowed turn into such monsters (I personally find the stats on Irish nationwide incredible considering it was only supposed to be a small building society) but its not really their responsibility--the system didn't control them properly, it was always going to happen........

I liken what happened to parents leaving a number of small children unattended in a house over a weekend with lots of sharp cutlery lying around, maybe a drinks cabinet unlocked, dads secret stash lying casually on the sofa, and oh perhaps a couple of loaded shotguns in the house....in this scenario I imagine the small children to be "the banks" and I imagine the parents to be the "regulators" in all honesty is the outcome of this ever going to be anything particularly positive

question is, who would you blame in this situation, would it be a) the banks (small children driven by curiosity[insert share price and profit margins here] with no sense of responsibilty if you're not working towards or making an effort to give it to them) or b the regulators (parents who believe in light touch parenting .....ah paddy sure we'll look in on them on monday and see how they are doing, sure they'll have to learn how to open a tin of beans sometime!)


basically I don't blame the banks one bit....true to form they are doing or trying to do exactly what they always have tried to do ...make money...unfortunately in the recent past they went for short term gain for a small number of individuals under the stewardship of mini dictators that lost the run of themselves and long term pain for the rest of us.....but thats hardly their fault... they were let do it....we let them do it to some extent...a lot of us share some responsibility for what happened...a majority of us elected our politicians..allowed ourselves to be bought off with wage increases/social welfare increases etc while house prices/food/etc went through the roof, bloody hard to say no to a wage increase etc though isn't it? Mary I'm not accepting that 2.5% sure its for the good of the country dontcha know!


question is, now that the tide is out and you can see whose been swimming without their boxers...are you going to let them do it again?

or will you be bought off (like the majority) if someone offers you the right incentive?

I say punish those in positions of responsibilty in banks if it can be proven they have commited a crime, come down hard on directors with large unpaid loans, if at all possible institute a legal mechanism for a reduction in the massive pensions/or clawback of bonuses paid to boards of directors and ceos if a bank is partially or fully under state control or gets injections of public money.....if this is necessary then clearly said directors/ceos were not doing their jobs properly and should not be entitled to such performance bonuses etc...reality is I suppose their contracts awarded bonuses on the basis of meeting lending targets and never mentioned how reckless or not the lending had to be..but still Id like to see at least an effort at something done about this.....if only as a deterrant for the next generation of would be gordon gekko bankers.

expecting the banks to take responsibilty for their actions...silly imo...go after the individuals and hit them where it hurts (their wallets).....and moreso "going forward" as B.Cowen would say....because as much as it pains me to say it, going after it retrospectively is a bit like closing the barn door.

Cavehill Red

amacca wrote: »

in this scenario I imagine the small children to be "the banks" and I imagine the parents to be the "regulators" in all honesty is the outcome of this ever going to be anything particularly positive

Metaphor FAIL.

amacca

Cavehill Red wrote: »

Metaphor FAIL.

really? how so?


regulators (in Ireland during bubble) = parents irresponsible in their actions and not applying consequences for bad behavior

banks = immature children who don't want to or cant see the bigger picture because of their nature - banks behavior driven by bottom line - unless responsibility is imposed on them someone will always rise to the top and run the organization for short term profits, selfish personal gain with no eye on sustainability

I always thought a metaphor was a comparison that shows how two things that are not alike in most ways can be similar in some?


until you show me the error of my ways I'm going to have to declare a

FAIL FAIL

Cavehill Red

amacca wrote: »

really? how so?


regulators (in Ireland during bubble) = parents irresponsible in their actions and not applying consequences for bad behavior

Fail part one - there was no significant regulation because the government oversee the regulators. (Or perhaps you consider them the grandparents?)

amacca wrote: »

banks = immature children

Fail part two - this attempts to exonerate adult men (and one woman) being paid millions of quid a year (plus whatever they grabbed in bonuses and dodgy loans) from their behaviour.
They weren't children, they were gamblers and crooks. They weren't unaware of their actions, they knew exactly what they were doing.

amacca wrote: »

I always thought a metaphor was a comparison that shows how two things that are not alike in most ways can be similar in some?

Fail part three - relying on google and RHL School's website to tell you what a metaphor is.
A metaphor is an analogy which connotes a semantic meaning by way of comparison.
Your comparison is sh!t, because none of it maps across from the one concept to the other.

amacca

Cavehill Red wrote: »

Fail part one - there was no significant regulation because the government oversee the regulators. (Or perhaps you consider them the grandparents?)

Getting off topic but I feel I have to defend myself


fair enough to an extent I suppose, regulators themselves answer to a higher power . . but .. their job description is surely to ensure that banks operate responsibly...they didn't, in this respect I consider them to be quite like parents not carrying out their duties properly

banks need regulators because we know they cannot be trusted to behave responsibly -- not behaving responsibly is a trait common to many young children (banks have different motivating factors for their behavior sure but it still amounts to irresponsibility)

Cavehill Red wrote: »

Fail part two - this attempts to exonerate adult men (and one woman) being paid millions of quid a year (plus whatever they grabbed in bonuses and dodgy loans) from their behaviour.
They weren't children, they were gamblers and crooks. They weren't unaware of their actions, they knew exactly what they were doing.

I'm afraid this one is a FAIL on your part....

banks are not men and one woman (I presume you mean gillian bowler?), as I mentioned in the post they are organisations......

I fully believe in consequences for irresponsible/criminal behavior for individuals (as I thought was abundantly clear from my post)

in no way does comparing the behavior of banks to children exonerate their directors (or even them) from bad behaviour....


it just enforces the point that they need to be monitored and controlled

if a society expected a bank to behave perfectly...why appoint a regulator..they are there to ensure the banks don't step out of line....they failed to do this

Cavehill Red wrote: »

Fail part three - relying on google and RHL School's website to tell you what a metaphor is.
A metaphor is an analogy which connotes a semantic meaning by way of comparison.

O.K.

I was relying on the good auld interweb to define a metaphor as I was currently logged on and I wanted to be accurate before refuting your post, how is that a failure?....I dont obviously trust everything I read on the web but If I break down your definition of a metaphor it seems pretty close to mine

eg: the interweb says that an analogy can be described as

"drawing a comparison in order to show similarity in some respect"

it also says that connotes is

"express or state indirectly"

while semantic relates to meaning



so I say a metaphor is "a comparison that shows how two things that are not alike in most ways can be similar in some"

and you say its a its a comparison which shows similarity in some respect expressed or stated indirectly....

tomato tomatoe surely...

and if in your opinion thats not what you said then please tell me specifically where the definitions of analogy or connotes are incorrect above and please try to be succinct - if you are correct you shouldn't need to dress it up.

Cavehill Red wrote: »

Your comparison is sh!t, because none of it maps across from the one concept to the other

none of it maps across....

which bits don't map across,

the bit about the banks behaving irresponsibly......like irresponsible children

or the bit about the regulators behaving like irresponsible parents and not regulating kids properly

I think it maps quite well.....while not being similar in every respect.....a bit like oh an analogy

hope you havent been spending too much time reading about signs and signifiers in the latest issue of semiotics monthly...those lecturship positions in DCU school of communications are like hens teeth these days!

Cavehill Red

amacca wrote: »

Getting off topic but I feel I have to defend myself


fair enough to an extent I suppose, regulators themselves answer to a higher power . . but .. their job description is surely to ensure that banks operate responsibly...they didn't, in this respect I consider them to be quite like parents not carrying out their duties properly

banks need regulators because we know they cannot be trusted to behave responsibly -- not behaving responsibly is a trait common to many young children (banks have different motivating factors for their behavior sure but it still amounts to irresponsibility)

Banks don't need regulators. They need regulation. That was the responsibility of the government, which instead (advised by vested interests and influenced by laissez-faire regulatory regimes elsewhere) enforced nothing to hinder the dodgy banking practices and rather, actively encouraged them.

amacca wrote: »

I'm afraid this one is a FAIL on your part....

banks are not men and one woman (I presume you mean gillian bowler?), as I mentioned in the post they are organisations......

I fully believe in consequences for irresponsible/criminal behavior for individuals (as I thought was abundantly clear from my post)

in no way does comparing the behavior of banks to children exonerate their directors (or even them) from bad behaviour....

Banks are institutions, yes. Their policies were guided and controlled by very small numbers of people. To suggest that the IT guy or the counter staff had anything to do with setting policy is disingenuous.
And attempting to depict the deliberate policies of those bank board members and top echelon staff as akin to the unknowing behaviour of children IS an attempt to exonerate them from responsibility for their actions.

amacca wrote: »

it just enforces the point that they need to be monitored and controlled

if a society expected a bank to behave perfectly...why appoint a regulator..they are there to ensure the banks don't step out of line....they failed to do this

Because everyone else had one. But it wasn't intended that they do anything, anymore than regulators were expected to intervene in Greenspan's free-for-all in the US. Irish policy mimicked that of other states, down to having regulators but no enforced regulation. More Bertienomics in action.

amacca wrote: »

O.K.

I was relying on the good auld interweb to define a metaphor as I was currently logged on and I wanted to be accurate before refuting your post, how is that a failure?....I dont obviously trust everything I read on the web but If I break down your definition of a metaphor it seems pretty close to mine

eg: the interweb says that an analogy can be described as

"drawing a comparison in order to show similarity in some respect"

it also says that connotes is

"express or state indirectly"

while semantic relates to meaning



so I say a metaphor is "a comparison that shows how two things that are not alike in most ways can be similar in some"

and you say its a its a comparison which shows similarity in some respect expressed or stated indirectly....

tomato tomatoe surely...

Except tomato is correct, and tomatoe is wrong. Sorry.

amacca wrote: »

and if in your opinion thats not what you said then please tell me specifically where the definitions of analogy or connotes are incorrect above and please try to be succinct - if you are correct you shouldn't need to dress it up.

I have done so twice already - your analogy doesn't work because depicting the banks and those in charge of them as behaving like children exonerates adults who were considered experts in their fields as being not responsible for their actions. Clearly, they knew exactly what they were doing. They simply gambled and failed.

amacca wrote: »

none of it maps across....

which bits don't map across,

the bit about the banks behaving irresponsibly......like irresponsible children

Exactly. That doesn't map. Because it wasn't simply irresponsible. It was deliberately reckless, greedy, self-serving and probably criminal (though we'll never know because there is no appetite in government to see any white collar criminals prosecuted, never mind jailed.)

amacca wrote: »

or the bit about the regulators behaving like irresponsible parents and not regulating kids properly

A better analogy is a dog on a leash being unable to attack. Or a toothless lion. The regulator was not irresponsible. They were shackled, and operating in a climate were to intervene was actively discouraged by their OWN higher authority - government.

amacca wrote: »

I think it maps quite well.....while not being similar in every respect.....a bit like oh an analogy

hope you havent been spending too much time reading about signs and signifiers in the latest issue of semiotics monthly...those lecturship positions in DCU school of communications are like hens teeth these days!

Signs and signifiers? How very Seventies of you.

amacca

Cavehill Red wrote: »

Banks don't need regulators. They need regulation.

wow! and would that regulation be carried out by regulators perhaps? maybe not good ones but individuals one could call regulators at a fondue party (to continue that seventies theme)

If banks need regulation as you suggest then I put it to you that they naturally also then need regulators and there is nothing incorrect about my comment.......... or is this going to turn into a circular which came first the regulation or the regulator type argument?

Cavehill Red wrote: »

That was the responsibility of the government, which instead (advised by vested interests and influenced by laissez-faire regulatory regimes elsewhere) enforced nothing to hinder the dodgy banking practices and rather, actively encouraged them.

indeed, no argument here......this is my opinion too, our elected representatives are at fault as was (at least I thought) made abundantly clear in my initial post.

Cavehill Red wrote: »

Banks are institutions, yes. Their policies were guided and controlled by very small numbers of people. To suggest that the IT guy or the counter staff had anything to do with setting policy is disingenuous.
And attempting to depict the deliberate policies of those bank board members and top echelon staff as akin to the unknowing behaviour of children IS an attempt to exonerate them from responsibility for their actions.

But I'm not suggesting the IT guy or the counter staff are responsible for the policy...nor have I at any point.....what I am suggesting with the analogy is that the organization as a whole will behave irresponsibly due to the pressure to grab more market share, increase share price, make more profits for shareholder (short term in the case of our banks) and natural desire of top echelon staff to feather their own nests.

I'm suggesting that this singular drive for profits if left unchecked will result in trouble .....much like leaving immature kids to their own devices.

comparing banks to immature children does not exonerate top echelon staff for their failed policies or personal responsibility...that's taking the analogy too far or just retyping the same thing because you personally believe it to be true despite what anyone else says or indeed what was made clear from their initial post....

Cavehill Red wrote: »

Because everyone else had one. But it wasn't intended that they do anything, anymore than regulators were expected to intervene in Greenspan's free-for-all in the US. Irish policy mimicked that of other states, down to having regulators but no enforced regulation. More Bertienomics in action.

go back a bit further than greenspan...keep going on past the seventies .....my point is still very valid...just because their initial purpose was/is subverted does not mean they were not intended to control reckless behaviour by financial institutions...and that does mean that banks(organizations not individuals) are not expected to behave responsibly unless they are being overseen.....like children

regulators were intended to regulate....they've been gradually muzzled but they were there to regulate initially which means that banks were not trusted to operate responsibly without being overseen

Cavehill Red wrote: »

Except tomato is correct, and tomatoe is wrong. Sorry.

O.k. but that's still avoiding my question of how your definition of a metaphor, see below

"A metaphor is an analogy which connotes a semantic meaning by way of comparison"

is substantially different from mine, see below

"a comparison that shows how two things that are not alike in most ways can be similar in some"


you rubbished my internet sourced definition of metaphor in favour of your own more wordy definition and claim this to be a fail on my part, yet the seem to be essentially the same definition as I broken down in my previous post

how do you arrive at fail part three given that youre attempted obfuscation by means of a smattering of semantics yielded pretty much the same definition as my own.

Cavehill Red wrote: »

I have done so twice already - your analogy doesn't work because depicting the banks and those in charge of them as behaving like children exonerates adults who were considered experts in their fields as being not responsible for their actions. Clearly, they knew exactly what they were doing. They simply gambled and failed.

once again.... it doesn't exonerate adults in positions of responsibilty within those organizations......im saying the organization as a whole behaves this way because of the environment it operates in....light touch regulation = organization behaving irresponsibly be it a bank or multinational pharmaceuticals company....that doesn't in anyway mean that the director that oversees billions in reckless lending or the director that gets the results of a set of clinical trials doctored are not responsible for their actions whether you say it twice or any number of times

what it does do is show how individuals in positions of responsibility within organizations need to be made responsible for their actions (through applying consequences) if society wishes the organization as a whole to behave responsibly.

Cavehill Red wrote: »

Exactly. That doesn't map. Because it wasn't simply irresponsible. It was deliberately reckless, greedy, self-serving and probably criminal (though we'll never know because there is no appetite in government to see any white collar criminals prosecuted, never mind jailed.)

but being deliberately reckless is irresponsible

being greedy is irresponsible

being totally self serving is irresponsible

being criminal is irresponsible

EPIC FAIL

Rewording what Ive posted doesn't mean the post was incorrect.

Cavehill Red wrote: »

A better analogy is a dog on a leash being unable to attack. Or a toothless lion. The regulator was not irresponsible. They were shackled, and operating in a climate were to intervene was actively discouraged by their OWN higher authority - government.

true .....its hard to blame a regulator for not doing what they should when the government would in all probability not have given them any backing if they had done their job properly, perhaps was actively discouraging them from doing so....a better analogy for the regulators perhaps but it doesn't mean my analogy doesn't work for the situation as a whole.....an analogy doesn't have to mirror every last detail...certainly not worthy of a FAIl given how flimsily you've defended that statement so far.

Cavehill Red wrote: »

Signs and signifiers? How very Seventies of you.

Yes well my flares need ironing so I'm off now.

The_Conductor

Cavehill Red wrote: »

Banks don't need regulators. They need regulation. That was the responsibility of the government, which instead (advised by vested interests and influenced by laissez-faire regulatory regimes elsewhere) enforced nothing to hinder the dodgy banking practices and rather, actively encouraged them.

Banks most certainly need both regulators and regulations. You can have bewildering arrays of regulations covering every possible eventuality- however if you do not have a regulator willing to implement the regulations- they are totally worthless. We had a situation of 'light regulation'- where the condensed regulations were not enforced by the regulator- leaving financial institutions to their own devices. In an industry which is for all intents and purposes, not being regulated- where a competitor is allowed to change the rulebook to the detriment of the other market participants, it really is a case of change their business models- or go the way of the dodo......

The government were given good advice by both external advisors (think of Peter Bacon's several reports) alongside the ESRI and civil servants- they choose to ignore advice that they considered would kill their golden goose. Anyone who suggested the property bubble was unsustainable- was suddenly persona non gratia.......

AIB- certainly should have been a more prudent operator than the other institutions (esp. as they had to be rescued by the government on a previous occasion)- they would have been finished as a financial institution had they not lined up with the other institutions and followed suit. Yes- it was stupidity- however, the bigger stupidity was a lack of willingness by the government to do anything that might rock the boat- that ultimately tipped the scale the other direction........

Cavehill Red wrote: »

Banks are institutions, yes. Their policies were guided and controlled by very small numbers of people. To suggest that the IT guy or the counter staff had anything to do with setting policy is disingenuous.
And attempting to depict the deliberate policies of those bank board members and top echelon staff as akin to the unknowing behaviour of children IS an attempt to exonerate them from responsibility for their actions.

Banks lending policies were guided and controlled by the market in which they operated. This was an unregulated market. Some competitors introduced products and practices that gave them advantages over other market operators. You either aped these policies, alongside coming up with your own, or you threw in the towel. Shareholders demanded returns similar to competitors- or else heads on blocks. Anglo Irish was turning out profits of over 2 billion at the peak- totally unreal, given it was only ever supposed to be a niche bank.......

I am not trying to excuse the behaviour of the banks- which was both misguided and inexcusably lax- simply put it into context- that this is the environment they were operating in- one which was not regulated, and one with shrill shareholders who demanded ever increasing profits, alongside the government who demanded ever increasing property related income flow........ Woe betide anyone who was going to spoil the party.......

Cavehill Red wrote: »

Because everyone else had one. But it wasn't intended that they do anything, anymore than regulators were expected to intervene in Greenspan's free-for-all in the US. Irish policy mimicked that of other states, down to having regulators but no enforced regulation. More Bertienomics in action.

Cavehill Red wrote: »

Except tomato is correct, and tomatoe is wrong. Sorry.

We are being pedantic.......

Cavehill Red wrote: »

I have done so twice already - your analogy doesn't work because depicting the banks and those in charge of them as behaving like children exonerates adults who were considered experts in their fields as being not responsible for their actions. Clearly, they knew exactly what they were doing. They simply gambled and failed.

Certainly banks gambled and failed. However- even casinos have house rules which are rigidly enforced........ We had house rules- but we didn't even pay lipservice to them....... Why do you think the government got addicted to external consultants- because they didn't like what they heard from their civil servants, the ESRI and commentators such as Peter Bacon.........

Bankers are not children- but they do need a defined environment in which to operate- Ireland was like the wild wild west, where anything goes......

Cavehill Red wrote: »

Exactly. That doesn't map. Because it wasn't simply irresponsible. It was deliberately reckless, greedy, self-serving and probably criminal (though we'll never know because there is no appetite in government to see any white collar criminals prosecuted, never mind jailed.)

Certainly there was criminality- esp in the case of certain noted individuals, and some off the book deals, such as artificially inflating assets without disclosure to shareholders. What is the point in labouring this though? We could have another decade of tribunals- but who would gain? No-one but the lawyers......... Do we really want to go down that road?

Cavehill Red wrote: »

A better analogy is a dog on a leash being unable to attack. Or a toothless lion. The regulator was not irresponsible. They were shackled, and operating in a climate were to intervene was actively discouraged by their OWN higher authority - government.

The regulator by his own admission- operated a 'light touch'. There was some sort of implicit understanding that a nudge and a wink was sufficient to keep people on the straight and narrow. This was a ridiculous approach- and has sank numerous banks- both foreign and national, that decided to domicile themselves here. I don't really know why you don't accept a degree of irresponsibility on the part of the regulator? If you wanted to argue this point- you could point out that the manner in which areas of responsibility were parcelled out between the regulator and the central bank, left too many vague areas where no-one knew who was in charge- but even this is making excuses for the regulator.........

Banks operated in a wild west environment- where they aped the actions of their competitors, while trying to introduce their own competitive advantages, or they got the hell out of the market....... Towards the end, and more recently- some did indeed get the hell out of the market.......

Its nice to think of burning effegies of bankers and having a symbol that we can attack to blame for the woes we are now in. Its not as simple as that though- we all called for lower personal taxes, we all wanted that '00' car- hell even social welfare recipients thought it their right to have a few holidays a year in Spain (see the State Benefits thread for some really bizarre expectations).

Government became addicted to 'partnership' agreements- where they shovelled unbelievable sums of money at council boards, charities, organisations, quangoes and literally anyone who came to them with a half baked idea. No-one tried to stop them. We have no mechanism to impeach our politicians- though to be fair- its the entire political situation that needs overhaul, not simply the current shower of incumbents shown the door. Do you really imagine Fine Gael and Labour would do any different than the FF shysters? I don't........

We all lost the run of ourselves. We were somehow 'special'. The norms that define economic boom and busts- somehow didn't apply to us. If you go back to the late 70s and the boom and bust in agricultural land- you could very easily recycle the rhetoric- we really do seem to be incapable of learning........

Cookie_Monster

When were trackers first issued?

I find it very hard to believe that only 10% are variable, have trackers not only been around for a reasonably short amount of time, like late 90's on?

The_Conductor

Cookie_Monster wrote: »

When were trackers first issued?

I find it very hard to believe that only 10% are variable, have trackers not only been around for a reasonably short amount of time, like late 90's on?

Royal Bank of Scotland (RBS) introduced tracker mortgages to Ireland in 1999, limiting it to those with an LTV of less than 60%. Irish lenders followed suit, and it was one hell of a slipery slope......

D3PO

Cookie_Monster wrote: »

When were trackers first issued?

I find it very hard to believe that only 10% are variable, have trackers not only been around for a reasonably short amount of time, like late 90's on?

its due to impact 60,000 people apparantly. Does AIB have 600,000 mortgages on their loan book ? 10% sounds about right to me although you would imagine it should be more.

D3PO

bobbysands81 wrote: »

So the bank are bleeding the 10% dry to make up for losses from the other 90%, .

banks are making money on the Fixed rates. Fixed rates are also due to increase for anybody locking into one. So its not that 10% are being targeted.

At the same time you can lock into a fixed rate before 4pm today. You have a choice to make, but if you decide to stay on your SVR you cant then come on and complain about those who have taken up other deals.

The_Conductor

D3PO wrote: »

banks are making money on the Fixed rates. Fixed rates are also due to increase for anybody locking into one. So its not that 10% are being targeted.

At the same time you can lock into a fixed rate before 4pm today. You have a choice to make, but if you decide to stay on your SVR you cant then come on and complain about those who have taken up other deals.

Looking at yesterday's figures- I'm not sure they are making money even on fixed rates. Their rates are even now- well over 1.25% below retail levels in other EU countries, and their SVRs are almost 2% below the interbank lending rates. This is why Irish banks have the highest reliance on ECB wholesale lending, of all countries in the Eurozone (incl. Greece).

Irish banks are on life support- both Irish and also ECB support. Irish consumers are used to incredibly low price credit. Its an addiction we need to accept we can no longer allow to continue.