Solvency V Liquidity

boardswalker

Recently, Brian Lenihan said, (paraphrase) of the bank guarantee events, that it was not a solvency issue, rather a liquidity issue.

Actually here is a quote from the irish independent "Mr Lenihan said it certainly wasn't brought to his attention that Anglo was facing insolvency rather than a liquidity problem".

Now are these not essentially the same thing.
Solvency is the ability to pay your debts as they fall due.
Liquidity is the ability to turn assets into cash without depressing the price of the assets.

The only reason the cash was needed was to pay debts as they fell due.
So it must have been a solvency issue.

Are they trying to split hairs, here.

ei.sdraob

They are trying to act dumb and distance themselves by blaming someone else

typical FF strategy



you just need to watch that blame ****fest on RTE called Freefall to get a taste of this political strategy

They are weak (for allowing banks to hold country ransom) and/or stupid (for handing good money over to them after bad)

and I hope people remember this come next election!

_Kaiser_

ei.sdraob wrote: »

and I hope people remember this come next election!

They won't! The general public (particularly in this country) are passive sheep with the political memory of goldfish.

FF will simply promise them an easing of the savage cuts and taxes we'll have to endure between now and then, FG will flap about ineffectually as they did during the last election, and the electorate will vote FF back in as "they're better than the alternative!" (as I've said before, FF didn't so much win the last election, as the "opposition" threw it away!)

Now if Richard Bruton had managed to oust Enda a few months back, things might have been different, but...