anglo deposits to aib

cazzak79

http://www.rte.ie/news/2011/0224/anglo.html

looks like getting ready to wind down anglo and irish nationwide finally

dan_d

While making AIB's balance sheet look better than it actually is.

They didn't have many options I suppose....Anglo is screwed, and since the Gov own AIB, which has a huge retail section, it was probably the easiest thing to do.

There certainly aren't any other banks out there that can afford to "buy out" the retail section of Anglo...

Sooner it's wound down, the better.Only problem being that it's more people out of a job.

Blowfish

dan_d wrote: »

While making AIB's balance sheet look better than it actually is.

Actually it doesn't really.

If you think about it from a banks point of view, deposits are effectively someone giving them money and them give an IOU back. The bank then goes and loans the money given to them to someone else.

As we know though, the loans went horribly wrong, hence were bought up by NAMA in the form of bonds. In other words, when it says AIB have bought the 'deposits', it means they bought both the "IOU's" to the initial depositors, and the NAMA bonds. In other words, the balance sheet will be matched.

Constantin Gurdgiev puts forward a good point that one reason they may have done it is because they are stuck for cash. With the 12bn of NAMA bonds, they can now run to the ECB and use the bonds as collatoral to borrow even more.

Duke Leonal Felmet

IL&P are getting the Irish Nationwide deposit book.

dan_d

Blowfish wrote: »

Actually it doesn't really.

If you think about it from a banks point of view, deposits are effectively someone giving them money and them give an IOU back. The bank then goes and loans the money given to them to someone else.

As we know though, the loans went horribly wrong, hence were bought up by NAMA in the form of bonds. In other words, when it says AIB have bought the 'deposits', it means they bought both the "IOU's" to the initial depositors, and the NAMA bonds. In other words, the balance sheet will be matched.

Constantin Gurdgiev puts forward a good point that one reason they may have done it is because they are stuck for cash. With the 12bn of NAMA bonds, they can now run to the ECB and use the bonds as collatoral to borrow even more.

Yes I understand that...I probably phrased it wrong.Doesn't make much different anyway, it doesn't exactly improve AIB's problems.
I wonder would the ECB allow them to borrow more based on that....???Hardly, given they know the state they're in