Are we now Nationalising?

kennyb3

I thought the government refused to nationalise all the banks and thus created nama, but now they will have effectively have nationalised AIB tomorrow? No?

MaceFace

kennyb3 wrote: »

I thought the government refused to nationalise all the banks and thus created nama, but now they will have effectively have nationalised AIB tomorrow? No?

Well, no, because it may be "effective" Nationalisation, meaning they will only control 70% of the bank.
The important part is that they can resist the inevitable calls from Joe Public and Paddy backbencher to keep the interest rates at a low level citing "market reasons".

Besides this, my understanding is that if they have of nationalised the banks, they would have to pay the outstanding debts out of cash reserves or state loans.
With NAMA, the loans (albeit much larger in scale) will "only* have a 1.5% interest rate.
If anyone could be bothered to do a little research and stick the numbers into a calculator I am sure it could be proved that the solution we are being forced into (not sure if this was not the plan all along), is better than the initial nationalisation that seemed the only viable alternative.

Permabear

This post has been deleted.

Dannyboy83

Worth a read:
http://www.davidmcwilliams.ie/2009/11/08/worst-case-scenario-looms

woodseb

Dannyboy83 wrote: »

Worth a read:
http://www.davidmcwilliams.ie/2009/11/08/worst-case-scenario-looms

that article is from Nov 2009?

where McWilliams claims

If I were a betting man, I’d say one of the big banks will be fully nationalised early next year

which looks to be wrong.....40% for BOI and 65% for AIB

and some of the paragraphs are confusing to say the least

Last week, the EU focused on the British banks, with Kroes turning on the wounded giant RBS (Royal Bank of Scotland).The British government, realising that RBS would not be able to raise new capital on the market, increased its stake in RBS from 70 per cent to 84 per cent. When a government owns 84 per cent of a bank, it might as well own the lot. No one in the private sector is prepared to invest in RBS, so that the government has become ‘‘the owner of last resort’’ in forced nationalisation.

A) what did Kroes do to RBS, apart from 'turning on' it?
owning a large majority stake in a bank is vastly different from full nationalisation - especially if we don't extend their guarantee


and this statement is very debatable...

During the summer, and even up to mid October, there was a chance that the banks, protected by Nama, could have gone out to the markets and raised equity.

But now that window seems to be shut. The markets are closed.

deals are still getting done when the conditions are right, the banks will be able to raise capital when their houses were in order, it wasn't simply a matter of timing as DMcW suggests