Let's re-write legislation conditions for banking sector bailout!

[Jackass]

Ok, so we're broke. Crippled with debt, and, to my mind, the bank has played a major roll in destryoing the Irish economy.

They leant irresponsibly, and when the people needed the banks money they knew how to charge for it and were happy to commit people to any level of debt, and when the bank needed the peoples money (and the people were in dire straights) the banks looked for every possible way to not pass on rate decreases and to rip off the people to try and balance their books while the tax money paid their six figure salary.

So let's write the conditions for the bailout cash, or at least what they SHOULD be:

1. Financial sector to be extremely heavily regulated with massive legislation governing lending criteria and an extremely powerful watchdog to be have many powers of intervention and punishment.

2. Lending criteria is to favour the consumer. In the case of arrears and attempts at foreclosure, the amount lent by the bank is irrelevant to the monthly amount to be repaid by the consumer. I.E., if a bank wants to be irresponsible and lend 1 million to someone on 25k a year (as an obvious extreme example to illustrate point) then when the consumer is unable to repay, the bank or consumer can go to a regulatory body who decides on the monthly amount to be repaid. This is worked in conjunction with the department of Revenue to determine earnings, and no more than 60% of net monthly income can be allocated to personal debt repayments and this is the maximum a bank can claim. So the responsibility is on the bank to lend to people who can afford it. If the person can not afford it, then the bank will have to accept an non transferable 200 year mortgage as a price to pay. Credit rating is still ruined though in order to prevent people abusing the legislation.

3. Interest rates changes are strictly regulated. An introductory rate is no longer to be used as a hook to get people into a mortgage, but more a base rate for a mortgage. Banks can not adjust interest rates to increase by more than 0.5% than increased from the ECB on a variable rate loan (i.e. someone signs a 3.00% mortgage variable, the bank can only increase by 0.5% above any ECB rate increases during the life of the loan, and any ECB decreases must be past on less a maximum of 0.5% - so, if variable rate is 3% on mortgage, and ECB drops 1%, loan rate must drop to minimum of 2.5% - if ECB increases by 0.25%, loan rate can be no more than 3.75% etc.) Rate decreases are mandatory to pass on and bank rates are kept strictly in a bracket of rates they can vary from the ECB base rate.

4. All personal banking, Euro fund transfer, ATM usage are permanently fee free to all Irish personal bank accounts as a thank you for bailout.

5. Maximum credit card interest rates as set out by regulatory body. Maximum arrears amount on % of card limit allowed before usage of card must be suspended. If the bank do not suspend the card that has gone into arrears of a certain % above the card limit, the consumer is not responsible for the additional amounts or interest.

6. A strict guideline to be published about ethics and responsibility to be issued to all senior ranking bank officials outlining what offences can be rendered as blacklisting a person from the industry (with a license required to be a senior bank official) and a new line of criminal offenses for irresponsible behaviour as a senior banking official.

7. Maximum % of wage increases on an increasing scale within the banking structure and a cap on bonus' to fall within a % of gross annual income.

8. Corporate and political conflict. To be a licensed senior banking official, you must have absolutely no invested interest in any political party and any donation or business dealings with any elected official is punishable by up to 10 years in prison.

9. Loan default, banking responsibility. For commercial finance, any major loan default must be submitted to the regulatory body for review. The panel will decide at what % the corporation defaulting is responsible for their debt, and what % is down to irresponsible lending from the financial institution which must be written off. No more blank cheques from bank managers to developers without any idea of where it's going or what it's guaranteed on.

10. A minimum amount of annual turnover that must be lent by all banks and a minimum amount of annual turnover that must be spent on advertising available financial products. If the bank does not meet it's minimum amount loaned each year they must show that there was no Economic appetite for the finance, the additional efforts they went to lend the money (responsibly) all financial applications are subject to an audit and any non-compliance is subject to massive fines and penalties.

There's some of mine - feel free to write your own! What would you like guaranteed from your billions of tax euros given to these people?

dan_d

To be honest, I think there's no "let's" about it, I think we have to. It looks as though the IMF/EU with a bailout will tear our banks apart and impose stringent conditions on them. Without a bailout, I'd imagine they will still be imposing very stringent conditions on them. No bad thing.

If I was working in a bank right now, I'd be quite worried (almost as worried as I am about my current state of unemployment....:o)

PCPhoto

why stop at the Banking sector ..... why not re-write the constitution and our laws to make them more modern - with less loopholes.

close up the situations where we know people are abusing the laws. (ie. welfare cheats, insurance cheats etc - huge payouts in the courts)

create stricter sentencing for repeat criminals - as a means to deter them from continuing the pathway - ensure prisons are at minimum EU standards - as basic as possible and rigid enforcement of the laws.

throw another 10,000 gardai on the streets - enforcing the laws (especially the traffic laws), slim down the HSE and create something that actually works..... have accountability as a primary ethos.

make people in power accountable for mistakes - if this means ministers resigning for wasting 50Million on E-Voting or abusing the expenses allowances ban them from politics for a minimum of 5yrs.