Government decides to split Anglo in two...

MrDarcy

Will it solve the problem???

Liam Byrne

MrDarcy wrote: »

Will it solve the problem???

Does it even remotely change the massive level of debt that THEY incurred and that WE have to pay back ?

Permabear

This post has been deleted.

MrDarcy

Liam Byrne wrote: »

Does it even remotely change the massive level of debt that THEY incurred and that WE have to pay back ?

It looks like a window dressing scheme to me, it fails to answer the only real question that the markets and the rest of us for that matter are really interested in, which is at what point does taxpayers money stop being made available to toxic debt that is associated with Anglo???

MrDarcy

This was only done for one reason, which was to try to give the markets something for this week to get the bond interest rate back down below 6%. Does it do anything at all to deal with the problem, I doubt it very much... More of the same, "we will tell you in October what it is going to cost"... How long is a piece of string???

RonMexico

Whats the point? The problem is still the same. HOW MUCH?:mad:

Liam Byrne

The "plan" - if it doesn't stretch the imagination too much to call it that - was torn apart on The Last Word by none other than Shane "I got two fingers from Anglo's turncoat so-called public interest representative" Ross.

Apparently the "good" half of Anglo (an oxymoron if I've ever heard of one, since none of Anglo is good, and "half" isn't even remotely accurate - more like 1% might be realistic after NAMA etc) is going to be a bank that takes deposits and doesn't give out loans.

Since deposits require banks to pay out interest, which is usually paid out of income / interest from loans that they give out, where the f**k is Anglo going to get the money for the interest ?

Trust FF to turn even a "good bank" concept into a liability.

waffleman

Are we really surprised?

Lenny has had zero credibility for a while now - he's not even worth listenin to at this stage - would only make you despair

His tag line should be "bluff now, pay later, isn't nepotism great"

danbohan

waffleman wrote: »

Are we really surprised?

Lenny has had zero credibility for a while now - he's not even worth listenin to at this stage - would only make you despair

His tag line should be "bluff now, pay later, isn't nepotism great"

agreed , he said on free fall on rte monday that he talked to french minster in ''french'' ,{what the fju@} reminded me of when his beloved aunt mary o rourke came on radio and said she was in the ''bath ''when some politician said something !

any wonder the markets are spooked .

hinault

Deck chairs and the Titanic, spring to mind.

This new idea to restructure what was Anglo Irish Bank, gets us no nearer to the issues which need to be answered.

1.How much will the bailout of Anglo cost?
2.What is the timeline for this new structure?

I heard the FF PR guy Micheal Whelan speaking on DriveTime today and he said that we just have to work through the issues in respect of Anglo.

We're 23 months in to this mess, Michael.
How much time does it take, FFS?

SeaFields

With regard to the thread title I assume that its Europe that has decided this rather than the government?

I heard some analyst (cant remember name) saying Europe were getting a bit fed up of the governments lack of conviction on Anglo.

Would that be accurate?

Orchard Rebel

SeaFields wrote: »

With regard to the thread title I assume that its Europe that has decided this rather than the government?

I heard some analyst (cant remember name) saying Europe were getting a bit fed up of the governments lack of conviction on Anglo.

Would that be accurate?

Lack of conviction or lack of convictions?

talla10

Won't solve anything imo. This is another example of government not listening to the people every person in this country (who doesnt work in anglo) wanted in shut down even the poxy green party favoured this and so did a lot of respected analysts across europe but no Fianna Fail have to look after their friends and to hell with the country. In 2 yrs Prime Time will have a show looking back to the today when the government made a balls of it again. Are we surprised??sadly no...(rant over)

zootroid

Liam Byrne wrote: »

The "plan" - if it doesn't stretch the imagination too much to call it that - was torn apart on The Last Word by none other than Shane "I got two fingers from Anglo's turncoat so-called public interest representative" Ross.

Apparently the "good" half of Anglo (an oxymoron if I've ever heard of one, since none of Anglo is good, and "half" isn't even remotely accurate - more like 1% might be realistic after NAMA etc) is going to be a bank that takes deposits and doesn't give out loans.

Since deposits require banks to pay out interest, which is usually paid out of income / interest from loans that they give out, where the f**k is Anglo going to get the money for the interest ?

Trust FF to turn even a "good bank" concept into a liability.

Exactly what I was thinking. How can a bank make money if it can't lend money?

Byron85

Just read it on the RTE website.

The Government has decided that Anglo Irish Bank will be split into a Funding Bank and an Asset Recovery Bank.

In a statement, the Government rejected Anglo Irish Bank management's plan to split the bank into a good bank and bad bank, but decided on a variation of that proposal.
Meanwhile, Taoiseach Brian Cowen has said the final bill for Anglo Irish Bank should be known by the end of October after detailed work by the Financial Regulator Matthew Elderfield.
Advertisement

Speaking on RTÉ's Six One News, Mr Cowen said the Government was anxious to bring finality to this matter and described today's announcement as a 'strategic decision'.
He said he would not be drawn on the overall cost which management at the bank has estimated will cost €25bn. Asked could the final figure be as much as €35bn, Mr Cowen said he would not get into that as it was not helpful.

Minister for Finance Brian Lenihan said the Government's announcement that Anglo Irish Bank will be split into two will provide certainty about the bank's future.
Minister Lenihan said a resolution of what he called 'our most distressed institution' was essential to the promotion of confidence and stability in the Irish financial system.
Current depositors will become customers of the funding bank, which will continue as a regulated bank. It will also be able to take new deposits, but will not be giving out any loans.
The asset recovery bank will eventually be sold or partly sold or its assets will be run off over a period of time.
The Government says the guaranteed position of depositors will be unchanged by the new arrangements and no action is required of them as a result of today's announcement.
The depositors will become customers of the funding bank which will be fully capitalised and continue as a regulated bank.
'In order to restore the reputation of the Irish Financial System it is essential to bring finality to the problem of Anglo Irish Bank - our most distressed institution', a Department of Finance statement said.
Anglo Irish Bank said it welcomed the certainty brought by today's decision. The bank pledged to implement the new plan, saying it would work closely with the Government and other State agencies to deliver the detailed proposals to the European Commission.
It said the funding bank 'would focus on maintaining a viable funding base in support of the recovery bank's needs'.
Chairman of the board of Anglo Irish Bank Alan Dukes said the plan put forward by the Government was a variant of the plans put forward by the bank.
He said the savings aspect of the Government plan was much more limited than the one the bank was proposing.
Asked if it would be more expensive than the €25bn estimated by the bank, Mr Dukes said this would depend on the view NAMA took with the discounts.
Asked if the plan was a winding-down of Anglo over ten to 15 years, he said it was a working out of the loan book.

'No certainty in plan'
Reacting to the decision, Fine Gael Finance Spokesman Michael Noonan said there was no certainty in the plan for Anglo Irish Bank announced by the Government.
He said what the markets needed was certainty and under the plan, we still do not know what the overall cost to the Irish taxpayer would be or how much more would be added on to the national debt.
Speaking on the Six One News, Mr Noonan said under the plan, neither of the two entities are going to lend.
He said the plan would now be submitted to Brussels but would not be sanctioned until 2011, which he said was too late.
The European Commission has said it welcomes the proposal, but it said further clarifications were needed before a final decision could be taken.
In a statement, EU competition commissioner Joaquin Almunia noted that the Commission had already authorised some €25bn in State recapitalisations 'which obviously creates distortions of competition'.
The Commissioner also said he was aware of the situation of the Irish financial sector and understood it was necessary to continue, for the time being, with government guarantees also for short-term bank liabilities.
Elsewhere, Fitch Ratings Senior Analyst Chris Pryce said he did not think it would make much difference because it had been broadly anticipated by the markets.
However he said the move would bring us a little closer to getting some sort of certainty over the future of Anglo Irish Bank.

http://www.rte.ie/news/2010/0908/anglo.html

Now, the question is will this actually work in any way, shape or form. All I can think of is the hydra from Greek mythology.

demonspawn

It's all just more political maneuvering to look like they're doing something when they're really not doing a damn thing. The bank should be bulldozed and the crooks involved split in two.

SeaFields

Orchard Rebel wrote: »

Lack of conviction or lack of convictions?

Well played Sir, well played :pac:

lmimmfn

How exactly does this differ from the good bank/bad bank strategy that they were proposing( even though both would be crap anyway )?

I listened to The Last Word but they never really covered what was different, it still seems the same, except for the idiotic no loans for the good bank, is it going to be an investment bank also? lol

Lenny Lovett

Speaking on RTÉ's Six One News, Mr Cowen said the Government was anxious to bring finality to this matter and described today's announcement as a 'strategic decision'.

These clowns wouldn't know a strategic decision if it kicked them up the asre. What posible strategy could they be following?

He said he would not be drawn on the overall cost which management at the bank has estimated will cost €25bn. Asked could the final figure be as much as €35bn, Mr Cowen said he would not get into that as it was not helpful.

€25bn, €35bn.... what's the difference at this stage. If they'd never guaranteed the feckin bank in the first place it could have been let go tits up as it should have.

Vinegar Hill

SeaFields wrote: »

With regard to the thread title I assume that its Europe that has decided this rather than the government?

I heard some analyst (cant remember name) saying Europe were getting a bit fed up of the governments lack of conviction on Anglo.

Would that be accurate?

I do not remember the Dáil being called today to debate this "Proposition" never mind vote on it. Where is the opposition and their opinions on this matter?

Europe has NOT approved this and in fact stated they do not support Anglo being split into a Good Bank and a Bad Bank.

The Government's plan to split Anglo Irish in to a "good bank - bad bank" has been rejected by the EU Commission in favour of an orderly wind down, according to Labour MEP Alan Kelly.

http://www.businessworld.ie/livenews.htm?a=2658439;s=rollingnews.htm

Commission Vice President and Competition Commissioner Joaquin Almunia today said he needs clarifications and requires and new notification before he is in a position to finalise its assessment and to take a decision.

http://www.businessworld.ie/livenews.htm?a=2658517;s=rollingnews.htm

GSF

So why would anyone put deposits in "good" Anglo? Presumably it would have to pay higher rates of interest than competing banks. So by not lending anything out it wil suck yet more liquidity out of the Irish economy. Pure madness.

Wolfe Tone

How will the good bank pay out interest? No loans? I dont know much but where will they get the money?

Lenny Lovett

MUSSOLINI wrote: »

How will the good bank pay out interest? No loans? I dont know much but where will they get the money?

You must've missed that bit on the News. We (the taxpayer) are going to chuck another few billion in to the "good" bank.... You couldn't make it up!:mad:

hmmm

GSF wrote: »

So by not lending anything out it wil suck yet more liquidity out of the Irish economy. Pure madness.

And even better, it won't be doing any lending so no liquidity is being returned like in a normal bank.

blue_steel

danbohan wrote: »

agreed , he said on free fall on rte monday that he talked to french minster in ''french''

Yeah I love how he stuck that in! What a peculiar mix of hubris and insecurity we have running this country. To paraphrase Bart Simpson "Nobody who speaks French could be a bad man."

PeterIanStaker

The're hoping we the sheeple will confuse motion with action.

the_dark_side

split Anglo in two halfs and multiply them together - x - = +

Callan57

Michael Noonan on the NEWS looked like he was squaring up to kick ten shades of sh**e out of Anglo

Ulysses Gaze

Callan57 wrote: »

Michael Noonan on the NEWS looked like he was squaring up to kick ten shades of sh**e out of Anglo

Unfortunately Noonan was leader of FG at the worst time possible - when the country (or 40% of it anyway) was in love with 'de man of de peeple'.

He is a good speaker and a much better politician, and more convincing, than Kenny.

Ulysses Gaze

So the FF plan is essentially:

1. Split Anglo into 2 Banks
2. ??????????
3. Profit!

thebaldsoprano

Can anyone explain what this means exactly?

The only detail I picked up is that they definitely won't be allowed to lend again, which is probably a good thing! After that, the legal entity that was a black hole for taxpayers' money is now two legal entities. Does that make any difference all?

lynner83

okay i was under the assumption that one part the "good part" will manage deposits held at the bank.

and the second will do the same job that nama was established to provide to all banks .

does anyone know if there has been any job losses at anglo? or will the tax payers continue to pay the wages and expense of this "bank"...

PeterIanStaker

thebaldsoprano wrote: »

Can anyone explain what this means exactly?

Ulysses Gaze

lynner83 wrote: »

okay i was under the assumption that one part the "good part" will manage deposits held at the bank.

and the second will do the same job that nama was established to provide to all banks .

does anyone know if there has been any job losses at anglo? or will the tax payers continue to pay the wages and expense of this "bank"...

Well Liam Carroll has just got the go ahead to finish their new HQ.

Anglo ain't going anywhere.

Ren2k7

Its doesn't matter how the money is chopped up, transferred around to NAMA, Good Anglo, Bad Anglo, I can't believe it's not Anglo, whatever, the 70 f**king billion + euros that is owed still has to be repayed by the taxpayer at the end of the day. :mad::mad::mad::mad::mad:

maninasia

That's it in a nutshell, it's all a very expensive shellgame to put off the inevitable massive hole in the finances and restructuring that would go with it.

It suits people in entrenched positions in government and public services and professional arenas, they can keep getting paid on this borrowed money for the moment. It also suits the developers/property owners, preventing them from taking an almost 100% haircut.

Ireland is a very strange mix of crony capitalism and socialism.

Citizen_Cutback

With a Press Release the Government has got rid of the odious Anglo Irish Bank brand and will let two new entities replace it almost overnight.

There must be an election in the offing in the Spring!

I wonder what imaginative names these new entities will get?

The Irish National Recovery Bank

The Irish National Holding Bank

Whatever names they pick from the Fianna Fail Republican phrasebook will surely appeal to the grassroots.

By Spring, Anglo Irish Bank will be but a distant memory and the Fianna Fail ministers will appear more offended than Ivor Callelly when unspeakable accusations are made about their handling of the Banking Crisis.

The Bond crisis doesn't come into it!

99nsr125

It's a wind down

The proposed "good bank" will not now materialize
as a new commercial bank and eventual stock market
float.

They'll remain state owned and state guaranteed.

The "New Good/Deposit" Bank will take deposits from industry
institutions etc therefore reducing the funding requirement of the
state to maintain capital reserve/ratio.

There's very little difference, primarily designed to retain
institutional deposits meaning we don't have to continually recapitalise
it as deposits are withdrawn.

It's no cheaper, is actually more expensive as no stock to sell
will ever appear and any chance of letting the previous "Bad Bank"
go under when it all went quite is now shot.

Dukes&Co were given an awful pile of poo but knew what they were doing
to salvage something but now they've been scuppered.

The ECB has already been buying Irish government bonds and we'll be doing what they tell us for the best part of a decade, we're very lucky we're very small.

Spain and Italy are too big to save if they get into trouble and the IMF is their last and worst option.

Liam Byrne

99nsr125 wrote: »

Dukes&Co were given an awful pile of poo but knew what they were doing to salvage something but now they've been scuppered.

Dukes was appointed to act in the public interests and yet told Shane Ross that Anglo was "none of his business".

So his agenda and bona fides are seriously questionable.

kevteljeur

This maneuver hasn't actually been approved by the EU yet. So it's all still talk and wish-lists, and ideas. Don't think that the Brians have the final say on this by any means, and they're still going to sweat it out for a while yet. The announcement is just for show, to keep the market happy until they figure out what happens next; which won't be up to them either.


k

99nsr125

Liam Byrne wrote: »

Dukes was appointed to act in the public interests and yet told Shane Ross that Anglo was "none of his business".

So his agenda and bona fides are seriously questionable.

He's been discretionary and has been like that with everyone.

Although maybe he's been promised 100% of the stock options!!!

ei.sdraob

Ulysses Gaze wrote: »

So the FF plan is essentially:

1. Split Anglo into 2 Banks
2. Pour more of our money into each one
3. Profit!

FYP

irishtrader

Have my doubts here..... "good bank / bad bank" is an established trouble shooting model, but lenihan's explanation is way different from the regular implementation....

ei.sdraob

Goodanglo & Badanglo :eek:

jokes aside

does anyone else think this is just a reinvention of NAMA?
"sure here lads, sure lets move all the bad assets into another pot over here? aye? they fell for that one before"

thebaldsoprano

Looks like we're not the only ones in the dark. From this article:

However, the decision to split the bank into a savings bank and asset recovery bank has failed to stem the uncertainty over the final cost of the bank to the State and the damage to the public finances.

And, worryingly:

Some €54 billion of Anglo deposits and funding will be put into a State-backed savings or funding bank – described by Lenihan as a “narrow bank” reflecting its function – but one which will not lend money to any new customers. (It may provide some loans to existing customers if it increases value to the bank.)

fontanalis

With two banks does this mean you will have two Financial Directors and other high paid management positions?

thebman

thebaldsoprano wrote: »

Looks like we're not the only ones in the dark. From this article:
And, worryingly:

Essentially reads as Anglo 1 went to hell so we'll get rid of the crap and start Anglo 2 lending to the golden circle again.

noodler

It is certainly a climbdown from the Government's previous support of Anglo's board in their proposals for the initial good / bad bank scheme.

Only 2 real differences but they are big ones:

1) All the non-Nama loans go to the bad bank (Asset Recovery Bank): Not just 80% (the worst ones) of them as was the case with the original proposal.

2) The good bank (Funding Bank) can't lend.

What intrigues me is fate of the Funding bank. Will depositors have enough fate to leave their money where it is? Will new depositors be attracted to it? What kind of interest rate will have to be offered? What operations (investment etc) will it involve itself in with depositors money?

noodler

thebman wrote: »

Essentially reads as Anglo 1 went to hell so we'll get rid of the crap and start Anglo 2 lending to the golden circle again.

I don't understand that?

The bank has no lending capabilities in its new form?

Liam Byrne

99nsr125 wrote: »

He's been discretionary and has been like that with everyone.

Doesn't excuse his behaviour.

He was being spoken to by a representative of his employers, and should have answered the questions that he was asked.

"Discretionary" doesn't even come close to describing the way that he acted.

He's OUR employee and needs a kick up the arse.

Liam Byrne

fontanalis wrote: »

With two banks does this mean you will have two Financial Directors and other high paid management positions?

Good point.....maybe Ahern will offer this to Callely ?