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Irish Natiowide Bailout Amount Increases.

  • 17-08-2010 09:43PM
    #1
    Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭


    This is reported from RTE website which suggest that the bailout of INBS will cost at least €0.5billion more than originally forecast.



    Tuesday, 17 August 2010 19:46

    The Governor of the Central Bank has indicated that the cost to the State of rescuing Irish Nationwide Building Society is likely to be much higher than first estimated.

    This comes a week after it emerged that the final cost of bailing out Anglo Irish Bank could be more than €24bn.
    In a speech in the Chinese capital Beijing, Professor Patrick Honohan said the potential cost to the State of EBS and Irish Nationwide will be about €4bn, which means the final cost of Nationwide will be in the region of €3.2bn.


    Earlier this year, Minister for Finance Brian Lenihan said Irish Nationwide would need around €2.7bn from the Government to meet targets set down by the Financial Regulator.
    In May, the society's chairman Danny Kitchen told members it may need even more than this.

    Last month, it emerged that NAMA had paid just over a quarter of the original value for the latest set of loans it was taking on from the society.
    One of the likely factors in the increased cost is that the loans Irish Nationwide is transferring to the National Asset Management Agency are turning out to be worth much less than expected


Comments

  • Registered Users, Registered Users 2, Paid Member Posts: 24,639 ✭✭✭✭Cookie_Monster


    God, why can't we just let at least one of them die?

    Stupid guarantee :(


  • Closed Accounts Posts: 2,372 ✭✭✭steamengine


    0.5 billion doesn't sound too much in the overall scheme of things. Out of interest if you laid out a line of 1 Euro coins it would extend for 7,500 miles approximately - now does it sound too much ? :(


  • Registered Users, Registered Users 2 Posts: 4,121 ✭✭✭RichardAnd


    0.5 billion doesn't sound too much in the overall scheme of things.


    You're right it doesn't and that's a frightening thing.

    I have a copy of the irish times from the day I was born (nov 20th 1986) and on it is a front page article warning of a possible increase to the national SW bill. Apparently it was some fuel entitlement and it was to cost the state the princely sum of 30 million pounds a year.

    I don't like to be pessimistic but I must say, may god help us if this doesn't end soon.


  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    RichardAnd wrote: »
    You're right it doesn't and that's a frightening thing.

    I have a copy of the irish times from the day I was born (nov 20th 1896) and on it is a front page article warning of a possible increase to the national SW bill. Apparently it was some fuel entitlement and it was to cost the state the princely sum of 30 million pounds a year.

    I don't like to be pessimistic but I must say, may god help us if this doesn't end soon.

    You're 104?:D:D


  • Registered Users, Registered Users 2 Posts: 4,121 ✭✭✭RichardAnd


    hinault wrote: »
    You're 104?:D:D


    Well I do look well for my age.

    Got my 8 and my 9 mixed up. You know what I meant ;)


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  • Registered Users, Registered Users 2 Posts: 4,693 ✭✭✭Laminations


    RichardAnd wrote: »
    Got my 8 and my 9 mixed up. You know what I meant ;)

    This should be Brian Lenihans excuse for getting his estimates so wrong :)


  • Closed Accounts Posts: 585 ✭✭✭MrDarcy


    The thing is, we are going to be bailing out the banks for many years to come, because the government failed to realise that the bad debts that the banks are carrying, are not just related to property. NAMA is all well and good, but for every business that fails, there is an overdraft that cannot be repaid, there is probably a commerical mortgage that cannot be repaid, (this usually will fall outside the remit of NAMA due to the amount involved which is too low for NAMA to take off the bank), there are probably vehicle HP loans, equipment leases, credit cards, short term loans, etc, that cannot be repaid. Then the staff of these businesses have private car HP loans, credit cards, domestic mortgages, term loans, credit union loans, that cannot be repaid.

    No sooner is NAMA taking on the first wave of private debt and there is a second huge wave of debt now coming at the banks, and there is not even the recognition that this debt exists never mind a strategy for squaring up to it. So my guess is that for the next few years we will be listening to statements from government and the banks that we greatly underestimated the amount of money that the banks needed and therefore have to put in more to meet the "house rules" that Herr. Elderfield is giving us...

    Don't forget when this crisis broke for the very first time, the government and the banks made the exact same mistake. When the recession first became apparent, we were told it was only a temporary recession that was specific to the construction industry. Then as the recession progressed as they surely do, it became clearer and clearer to everyone that the job losses in construction were just the first wave of the actual depression that we are now in. Politician's told everyone that they were just hyping things up and sabre rattling but to this day we are still losing 4,000 plus jobs a month. It is clear to everyone now that the recession is hitting every single industry very hard.

    In the same way, the recession is hitting every type of debt very hard, not just the debt that was associated with the construction industry. I believe the issues with the wider circle of economic debt such as private businesses and domestic debt is what will ultimately be the downfall of this state. With 30 houses a day being disconnected from the ESB grid it is hard to see how mortgages, credit cards, car loans, etc are being paid when people will then pay these debts and happily sit in the dark when the ESB come knocking on the door...


  • Closed Accounts Posts: 1,379 ✭✭✭Sticky_Fingers


    RichardAnd wrote: »
    Well I do look well for my age.
    Got my 8 and my 9 mixed up. You know what I meant ;)

    I wont worry about, hell with a skill like that I can see a glorious future in the department of finance just waiting for you. :p

    It is quite telling though that when I saw 0.5 billion my first thought was "is that all". It just goes to show that as a population we are so punch drunk with bad news and beaten over the head with big numbers that E500,000000 seems like small beans. Perhaps we should start writing out the numbers explicitly just to get across the enormity of the problem:

    • Anglo: E 2500,000000
    • Cowen's wage: E 257000
    • Average industrial wage:E 32000
    • The Dole: E 10244


  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    Mr Darcy has hit the nail on the head, in my opinion.

    The debt cycle is now in full train
    This banking/financial crisis has in turn directly led to sovereign debt situation meaning that personal debt, corporate debt, non-NAMA property debt are all now increasing.

    And as this debt increases, it feeds back in to the continuing fall in asset values of (Irish) properties upon which NAMA-bound loans were based.


  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    Following on from my previous mails, I think our politicians need to seriously consider the wisdom of bailing out Anglo and INBS.

    € 24.3,000,000,000,000 (24.3 billion) will be paid by the taxpayer to Anglo as things stand.

    €3.2,000,000,000,000 (3.2 billion) will be paid by the taxpayer to INBS also.

    €800,000,000 (800 million) will be paid by the taxpayer to EBS.

    And remember these are not final figures.

    Not do we have final figures for amounts to be paid by the taxpayer to Allied Irish Banks and Bank of Ireland.


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  • Registered Users, Registered Users 2 Posts: 4,121 ✭✭✭RichardAnd


    hinault wrote: »
    Following on from my previous mails, I think our politicians need to seriously consider the wisdom of bailing out Anglo and INBS.

    24.3,000,000,000,000 will be paid by the taxpayer to Anglo as things stand.

    €3.2,000,000,000,000
    will be paid by the taxpayer to INBS also.

    €800,000,000 will be paid by the taxpayer to EBS.

    And remember these are not final figures.

    Not do we have final figures for amounts to be paid by the taxpayer to Allied Irish Banks and Bank of Ireland.


    Thankfully, it's not quite that much. Knock 3 zeros off each bolded number ;)

    But either way, it's an absolute fortune that would be better used elsewhere. I don't take the populist view on NAMA or the bail out but I still think that money for Anglo at the least shouldn't have been given and that another solution should have been found.

    24 billion could have built us a few nuclear plants, created jobs or quite simply not be borrowed and spent at all.


  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    RichardAnd wrote: »
    Thankfully, it's not quite that much. Knock 3 zeros off each bolded number ;)

    I was using the old english definition, one billion is equal to one million million.

    I see that the American definition for one billion is one thousand million is now being used.

    So Anglo is to receive €24.3,000,000,000 using the American definition.
    INBS is to receive €3.2,000,000,000.
    EBS is due to receive €800,000,000.


  • Registered Users, Registered Users 2, Paid Member Posts: 24,639 ✭✭✭✭Cookie_Monster


    hinault wrote: »
    I was using the old english definition, one billion is equal to one million million.

    I see that the American definition for one billion is one thousand million is now being used.

    So Anglo is to receive €24.3,000,000,000 using the American definition.
    INBS is to receive €3.2,000,000,000.
    EBS is due to receive €800,000,000.

    there's also weird decimals in there.

    24,300,000,000


  • Registered Users, Registered Users 2 Posts: 7,849 ✭✭✭Brussels Sprout


    This story is on the RTE website.
    Michael Fingleton has spoken for the first time about his role in the banking crisis.

    The former Irish Nationwide boss told RTÉ News he felt remorseful about how taxpayers were forced to bailout the building society.

    He was speaking in Dublin Airport on his return from Spain.

    Mr Fingleton said everything was being done that could be done to address banking problems.

    When asked if he would repay the €1m bonus he received in 2008, he said he had already made a full public statement on the matter.

    On secret loans to directors at Anglo Irish Bank, which were temporarily transferred to Irish Nationwide to remain hidden, Mr Fingleton said investigations would show the building society had no responsibility for the loans.

    He also said he had cooperated with investigations and would do so in every way he could.

    His comments come a day after Central Bank Governor Professor Patrick Honohan revealed it could cost about €3.2bn to recapitalise Irish Nationwide.

    Mr Fingleton ran the building society more than three decades before he stood down last year.


  • Registered Users, Registered Users 2 Posts: 2,010 ✭✭✭GSF


    Fingleton was sporting a nice tan on the news tonight.


  • Registered Users, Registered Users 2 Posts: 13,227 ✭✭✭✭jmayo


    God, why can't we just let at least one of them die?

    Stupid guarantee :(

    Exactly.
    We have been told that Anglo was systemic and that it was third largest bank.
    Only reason I can ever see for any reasoning of it being systemic was that it was so tied up with pension funds and quinn group.
    Even then it would probably have been cheaper to take the short term pain rather than pour 22 odd billion in recapitalisation and 50 odd billion through NAMA into the mess that is Anglo.

    But for th love of God what the f*** are we pouring billions into INBS, a small building society that was run as a fiefdom by one well connected bast***.
    RichardAnd wrote: »
    Thankfully, it's not quite that much. Knock 3 zeros off each bolded number ;)

    But either way, it's an absolute fortune that would be better used elsewhere. I don't take the populist view on NAMA or the bail out but I still think that money for Anglo at the least shouldn't have been given and that another solution should have been found.

    24 billion could have built us a few nuclear plants, created jobs or quite simply not be borrowed and spent at all.

    Check out last Sundays business post they did article on how we could have spent the Anglo money, everything from funding clean water for the third world to building tunnels.
    GSF wrote: »
    Fingleton was sporting a nice tan on the news tonight.

    I like to tan tha bast***s ass Singapore police style. :mad:

    I am not allowed discuss …



  • Closed Accounts Posts: 3,461 ✭✭✭liammur


    There should be no surprise there. It would appear government policy was always to understate the extent of the bailouts.


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