Irish taxpayers 'should foot bank bill'

Amirani

http://www.irishtimes.com/newspaper/breaking/2011/0413/breaking15.html


Irish taxpayers should not complain about having to bailout the country's crisis-hit banks and, in future, regulation should be steered at a European level, according to ECB executive board member Lorenzo Bini Smaghi.

In an opinion piece in today's Financial Times, Mr Bini Smaghi said Ireland's taxpayers should foot the bill as they are the ones that benefitted during the pre-crisis boom years and elected the governments that regulated the banks as the problems built.

"The principle of 'no taxation without representation' should work both ways. If taxpayers have the right to share in decision-making, they must also accept the consequences," Mr Bini Smaghi wrote.

"As long as the accountability of supervisors to taxpayers is primarily a national affair ... then there is a high risk that taxpayers will foot most of the bill. They should not complain when it actually happens."

Before taking power earlier this year, the new government said it wanted to restructure the debt of the country's battered banks so that bondholders accepted losses on their loans.

The ECB has been strongly against the idea, as it fears it could spark a chain reaction in the banking system and trigger a new Lehman Brothers-style crisis.

Mr Bini Smaghi said that while in theory, shareholders, managers and bondholders should bear the costs of a bank being restructured, in an open system like the euro zone's such problems were never black and white as they could pose systemic risks.

The situation where banks are based in one country but have subsidiaries carrying risks in another also creates the danger that they are not properly controlled by anyone.

Ireland's problems showed pure national regulation was flawed and in future needed to be steered at a euro zone level or wider, he said.

"Ultimately this would mean the integration of independent prudential supervision at the European, or at least euro area, level - to match the way burdens are shared when a systemic crisis strikes. Such a move may seem politically unpalatable, as taxpayers around the euro zone fear having to bail out the banks in other countries. But these taxpayers would at least have the assurance that banks in different countries would henceforth be subject
to uniform and independent supervision," Mr Bini Smaghi said.

thebigbiffo

let me see...hmmm...how should i put this?

GO **** YOURSELF Lorenzo Bini Smaghi.

starbelgrade

I think we should pay for everything that anyone asks us to.

Sure why not?

If we have money, sure we'd only be spendin' it on the daemon drink.

Sykk

The fact that I'm 21 years old, getting paid about 10k less a year than what I would be getting paid in a normal economy (Employers market and all that). Struggling to pay bills, never taken out a loan in my life - due to numerous reasons, one being all of the people who gained from the boom and bought 10 houses each.

The people who benefited from the boom aren't the only ones suffering, so I don't see any point in his logic.

Mark200

Sykk wrote: »

one being all of the people who gained from the boom and bought 10 houses each.

Who?

Sykk wrote: »

The people who benefited from the boom aren't the only ones suffering, so I don't see any point in his logic.

He was talking about the Irish people in general / as a whole, presumably.

ilovesleep

Lets see - how did i benefit from the banks? Oh yeah i was priced out from the housing market and didn't have an interest in buying and tieing myself down to a 30 - 40 year mortgage. How did i benefit from the stupity of others. Is it how i never took a loan for a holiday abroad or a car loan. Lets see, did I take on a loan of 40,000+ for a wedding. Last I checked Im single.
I have said this before, and I'll say it again - THE ELECTORATE ARE NOT ECONOMISTS
For me, and Im sure for many more, the past 10 years, wheather you were foolish or prudent is coming together like a complex jigsaw puzzle and what those years meant. Also, the did-hard FF fans would be of the older generation and who may not be able to use a computer or internet and therefore knows fcek all. If it wasn't for the internet I'd know nothing about it either.

Amirani

This is pure PR bull**** from the ECB to account for its own shortcomings. Blame for the Irish banking crises should be directed not just at the Irish Government and its fiscal policies but also the ECB and it's inability to adopt a monetary policy suitable for the whole Eurozone. The fact of the matter is that interest rates were far too low during the boom years, interest rates set in Frankfurt, allowing far too much cheap credit to flood the Irish economy. Ireland had no control over this cheap credit. Even if measures were put in place to restrict the provision of loans by Irish banks (which in itself is a questionable issue as the banks were private entities), Irish people had the ability to take loans from the likes of Royal Bank of Scotland and others. Placing the blame squarely on the Irish taxpayer is an absolute joke.

ejmaztec

Presumably, he has the same opinion on his fellow Italian countrymen, who are also in the sh1t? I wonder who he voted for.

CreepingDeath

niallsparky wrote: »

"The principle of 'no taxation without representation' should work both ways. If taxpayers have the right to share in decision-making, they must also accept the consequences," Mr Bini Smaghi wrote.

Everyone in Europe voted for the MEP's, who have to take some responsibility for the European banks wreckless lending.

sensibleken

Just goes to show that the people who run international capitalism are a shower of dishonest greedy cúnts!

wicklowdub

We should really pay for Greece and Portugal too.

ilovesleep

And how the fcuk did we benefit with a land of greedy developers hoping on making a mint, unable to pay their loans, leaving banks up sh1ts creek, government then turn around and decides that we were all in bed together and such properties lying idle with nama.

AH response: we need to blast that cnut with piss, and his ma too.

Jackohearts

Bollox. We should complain, hell we should riot. The banks did this to themselves and we should not have to pay, and now the Credit Union's 'Whats Left Tracker' show that many households are right on the edge. I did up http://www.twitpic.com/4kqc8f"]this poster[/URL] to show anyone who is angry about the banks. Take a look and see if you agree.

Doublin

niallsparky wrote: »

This is pure PR bull**** from the ECB to account for its own shortcomings. Blame for the Irish banking crises should be directed not just at the Irish Government and its fiscal policies but also the ECB and it's inability to adopt a monetary policy suitable for the whole Eurozone. The fact of the matter is that interest rates were far too low during the boom years, interest rates set in Frankfurt, allowing far too much cheap credit to flood the Irish economy. Ireland had no control over this cheap credit. Even if measures were put in place to restrict the provision of loans by Irish banks (which in itself is a questionable issue as the banks were private entities), Irish people had the ability to take loans from the likes of Royal Bank of Scotland and others. Placing the blame squarely on the Irish taxpayer is an absolute joke.

Exactly my thoughts. If he says we have sole responsibility, then why aren't the national central banks given more power over their monetary policies. The ECB imposed low interest rates when it suited the larger economies and now are raising them for the same reason. No concern for Ireland, yet we are meant to absorb any negative impacts. This is the same logic they are using in regards to the German/French bank loans here.

123balltv

Hey Mr Bini head
still worst to come for Irish people property tax, water rates/more taxes etc

go **** yourself Ireland will default we are a tiny, little Country who can never pay these banks go crawl for your money

themadchef

Jackohearts wrote: »

We should complain, hell we should riot.

Riot? LOL!!

Half of us can barley summon the will to get out of bed in the morning. Lazy ass generation wont suddenly grow balls now.

th3 s1aught3r

Irish people dont protest much, thats one reason why they are so keen to screw us. "Sure those thick Paddys just take it lying down, its great"