FF/Green goverment in september 08

Lucozade man

What should the goverment have done in september 2008?

later12

Well of course the wisest course of action would have been to prevent the options of lesser evil from havingg arisen in the first place, but seeing as how these are not on the table, and being confronted with all of the options (with the full benefit of hindsight) I would have, in consultation with European leaders,

• extend a bank guarantee which covered all deposits except for interbank deposits. subordinated bonds would be excluded.
• Nationalise Anglo Irish Bank simultaneously, or within the week.
• Extend further ELA from the CBI
• Immediately push for a European agency to handle troubled banks, or to do so as soon as the problem became more apparent
• Immediately push for a synchronisation of similar guarantees across the Eurozone and with the United Kingdom.

By September 2008, it was certainly too late for the state to consider pulling a Lehmans.

D1stant

Asked Gerry to send them a rather large bomb

johnnyskeleton

Let Anglo and Nationwide fail on the basis that they are insolvent.

Announce a system of emergency bankruptscy/examinership protection for the other banks to assess whether they are sustainable. Part of such a system might include a limit on deposits for a short period and a government guarantee for any loss directly incurred during the period (e.g. 100 days) to reduce the effects of a run.

At the end of the period, have full and open audited accounts detailing the exact position in each of the banks with projections as to what it would cost to save them based on best case, likely case and worst case scenarios.

Share this information with the EU and seek their advice and/or assistance in dealing with the banks. This could be in the form of an ultimatum that if the EU/ECB doesn't assist Irish banks then they are likely to be let fail.

Then, when they are possession of all the facts, if it still makes sense to put in place a guarantee, NAMA and the various amounts of recapitalisation money then so be it.

This approach is taken with non banking companies all the time and I fail to see why it could not be done with the banks. In fact, an examinership type scenario would work best where the case concerns companies that are "of systemic importance to the wider economy".

In the above scenario, supposing the government's theory that it was just a temporary liquidity problem was true, then all that would have happened is we would have experienced a temporary blip and then they could get back to lending. But as it turned out, such a system would have permitted an informed choice to be made instead of having to make the decision facing into the barrel of a gun.

So lets be clear, the fault is not whether they did or did not impose the guarantee, nama, bailouts etc because if they let the banks go then people would blame them for that. The fault is that they entered the guarantee recklessly, without considering any alternatives and without consultation with the EU or any transparency measures. Once all the information was available, people could then decide based on the relevant information. But we were never given that option and that is the real problem.

Godge

Nationalised Allied Irish Bank and Bank of Ireland as they were systemic banks. Let the others sink or swim on their own.

Look at where we are now. We have nationalised Allied Irish Bank anyway and are close to nationalising Bank of Ireland while we have a huge bill for the others. We could have saved the huge bill if we had just nationalised the big two.

Drumpot

Lucozade man wrote: »

What should the goverment have done in september 2008?

Offered free cheese sooner . . .

http://www.irishtimes.com/newspaper/breaking/2010/1105/breaking22.html

HellFireClub

Any Irish bank that found itself insolvent should have been closed down the next day, it's called capitalism, success is rewarded, failure is punished.

HellFireClub

HellFireClub wrote: »

Any Irish bank that found itself insolvent should have been closed down the next day, it's called capitalism, success is rewarded, failure is punished.

Exactly, the harsh reality is that if we had not of bailed out people in the 1980s then we might have prevented this. We should have started new banks if necessary.

Bailing them out keeps the same idiots who destroyed our money in the banks when they shouldnt be let near our money again. Failure cleans this out.

We should have swallowed the bitter pill it would save us trouble in the future. God knows what knock on effects NAMA, the guarantee and recapitalisations will have. We are storing up more far trouble for the future

the groutch

Called an election, let someone competent take charge

Laois_Man

We should NOT have bent over and practically begged Europe to give it to us any way they wanted so that we could generously 'take one for the team'!

Put simply: We had a loaded gun that would have been disasterous if we had pulled the trigger on Europe. We never pulled the trigger. We never pointed it in their direction. We never even threatened to pick up the gun!

FreudianSlippers

Laois_Man wrote: »

We should NOT have bent over and practically begged Europe to give it to us any way they wanted so that we could generously 'take one for the team'!

Put simply: We had a loaded gun that would have been disasterous if we had pulled the trigger on Europe. We never pulled the trigger. We never pointed it in their direction. We never even threatened to pick up the gun!

Come on... where would we have gotten the money if it weren't for the EU? Seriously.

We got a good deal, one which we couldn't have gotten on the markets...


otherwise, I agree with johnnyskeleton's theory.

Laois_Man

FreudianSlippers wrote: »

Come on... where would we have gotten the money if it weren't for the EU? Seriously.

We got a good deal, one which we couldn't have gotten on the markets...


otherwise, I agree with johnnyskeleton's theory.

Maybe you'rwe gonna call me nieve - On the markets!

We didn't have a problem getting funding on the markets until we took on bank debt! we should not have made a bank guarantee to the extent of the one that was made.

And part of johnnyskeleton's approach as described above, was also to threaten to pull the trigger on Europe...

johnnyskeleton wrote: »

an ultimatum that if the EU/ECB doesn't assist Irish banks then they are likely to be let fail.

FreudianSlippers

Laois_Man wrote: »

Maybe you'rwe gonna call me nieve - On the markets!

We didn't have a problem getting funding on the markets until we took on bank debt! we should not have made a bank guarantee to the extent of the one that was made.

And part of johnnyskeleton's approach as described above, was also to threaten to pull the trigger on Europe...

Nah... our interest rates were way too high to borrow on the market. We got a much better rate from the EU/IMF

Laois_Man

FreudianSlippers wrote: »

Nah... our interest rates were way too high to borrow on the market. We got a much better rate from the EU/IMF

Our interest rates weren't too high until we literally doubled our national debt overnight!

FreudianSlippers

FreudianSlippers wrote: »

Nah... our interest rates were way too high to borrow on the market. We got a much better rate from the EU/IMF

The markets didnt believe we could shoulder the bank guarantee and that is why we couldnt borrow on the markets!!

FreudianSlippers

Laois_Man wrote: »

Our interest rates weren't too high until we literally doubled our national debt overnight!

I'm almost positive that's incorrect, but cbf'd looking it up at the moment.

johnnyskeleton

Deleted User wrote: »

The markets didnt believe we could shoulder the bank guarantee and that is why we couldnt borrow on the markets!!

They still don't, and with every additional statement of support for the banks the yields get higher and higher.