Anglo - a view from Europe?

Scofflaw

Titbit from Brian Lucey, who has apparently been at a conference in Frankfurt, talking to bankers, central bankers and banking academics:

A summary of the views of the core Europeans would be ; Ireland is trying, and that's to your credit, but your legacy banking debts (read, the pro note) are going to be left with you, as YOU screwed up by lax regulation badly implemented. Oh, and your corporate tax rate? You want us to bail you out while you screw us with tax arbitrage? Not. Gonna. Happen.

http://brianmlucey.wordpress.com/2013/02/03/anglo-a-view-from-europe/

That would be uncomfortable for us, and immediately so for the government, who appear at this stage to be pinning not just much of their reputation on a deal for the PNs, but the stability of the coalition as well.

As to the accuracy of the views relayed, we can't of course know from what Lucey says exactly who was saying that, whether they have any input into the official lines that will be taken, how strongly they hold those opinions, and to what extent it's Lucey's interpretation, but still, straws in the wind.

cordially,
Scofflaw

ardmacha

as YOU screwed up by lax regulation badly implemented.

There is no doubt that this was the case. However the regulation wasn't so different from other places, the problem arose because money flowed to Ireland because of the point in the cycle it was at. Lower interest rates etc were always likely to blow a gasket in the likes of Spain or Ireland, that it did so at these locations is not just a moral failure on the part of the governments there, but a function to the structure of the Euro area generally.

Oh, and your corporate tax rate? You want us to bail you out while you screw us with tax arbitrage?

As I said before, if this "tax arbitrage" was moving a material amount from one place to another then why does Ireland have a large deficit and high unemployment? This kind of thing could be explained when Ireland had a "boom", but we now know that the boom was a credit induced one, not one resulting from the transfer of genuine economic activity from other EU states.

I think we need to get these points across.

Scortho

Scofflaw wrote: »

Titbit from Brian Lucey, who has apparently been at a conference in Frankfurt, talking to bankers, central bankers and banking academics:



http://brianmlucey.wordpress.com/2013/02/03/anglo-a-view-from-europe/

That would be uncomfortable for us, and immediately so for the government, who appear at this stage to be pinning not just much of their reputation on a deal for the PNs, but the stability of the coalition as well.

As to the accuracy of the views relayed, we can't of course know from what Lucey says exactly who was saying that, whether they have any input into the official lines that will be taken, how strongly they hold those opinions, and to what extent it's Lucey's interpretation, but still, straws in the wind.

cordially,
Scofflaw

Could the same not be said about Greece though? I can see where they're coming from in relation to corporation tax which is something that other finance officials would find hard to swallow. Possible solution would be to give up the 12.5% in return for a sizeable write down(like giving up tracker to get a big chunk of the mortgage written off) and then Adapt France's regime where if the company does x,y and z they pay lower tax.

Manach

My understanding is the the various Company Acts that regulate these were based on former UK legisation on giving money to buy their own shares, which they had subsequently amended but we had not yet reformed.

aindriu80

a lot of the above is just hot air. I don't know everything about the subject but just a few things. The german banks were not properly run when the Euro started. They are to blame for the entire mess. The help Greece got compared to what we had to put up with is not fair. Its time they gave us a break with the legacy debt, what they have been doing was no better.

antoobrien

ardmacha wrote: »

we now know that the boom was a credit induced one, not one resulting from the transfer of genuine economic activity from other EU states.

That is as simplistic as it is wrong (as a be all and end all) - we had the numbers of people in employment increase drastically during the period 1990-2007. The top of the boom may have been credit fueled but the economic growth that underpinned it was down to the growth i numbers in employment here in Ireland.

In 1998 there were 1.41m in employment, that peaked at the height of the boom at 2.06m (Q3 2007 & Q3 2008) with a steady increase in numbers employed at each step along the way.

Blaming external factors is easy and lazy, any money that came in here (and yes HBOS & RBS did pump a lot in) came in on the back of indigenous growth and market opportunity - they didn't create the market it was already there!

ardmacha

Blaming external factors is easy and lazy, any money that came in here (and yes HBOS & RBS did pump a lot in) came in on the back of indigenous growth and market opportunity - they didn't create the market it was already there!

This is off the point. The original contention was that Ireland "cheated" with their tax rate and somehow "stole" economic activity that should have been elsewhere. There was jobs growth in Ireland in the 1992-2002 period, when the Irish economy began to more closely resemble other northern European economies. There there was a period 2002-2008 when Irish standards of living exceeded other northern European economies, my point was that this latter phase was hype and nothing to do with tax rates only to do with dysfunctional banking regulation and get rich quick activity by banks.

Quite simply, it is risible to say that Ireland is "screwing" other EU countries with lower unemployment than we have.

professore

antoobrien wrote: »

That is as simplistic as it is wrong (as a be all and end all) - we had the numbers of people in employment increase drastically during the period 1990-2007. The top of the boom may have been credit fueled but the economic growth that underpinned it was down to the growth i numbers in employment here in Ireland.

In 1998 there were 1.41m in employment, that peaked at the height of the boom at 2.06m (Q3 2007 & Q3 2008) with a steady increase in numbers employed at each step along the way.

Blaming external factors is easy and lazy, any money that came in here (and yes HBOS & RBS did pump a lot in) came in on the back of indigenous growth and market opportunity - they didn't create the market it was already there!

Come ON ! The employment growth was fuelled largely by the massive housebuilding splurge that went on and the economic spinoffs from that, and the throwing of money at everyone that the banks did. After the 2001 dotcom bust, activity in the IT sector was dead and only gradually recovered in the following years - and this was the most dynamic non building sector related industry at the time.

I remember thinking "I don't know where this money is coming from?" at the time.

It was like those planners using the Eastern Europeans coming in to build the massive housing estates in the middle of nowhere to prove there would be a demand for them because of population growth.

antoobrien

ardmacha wrote: »

This is off the point. The original contention was that Ireland "cheated" with their tax rate and somehow "stole" economic activity that should have been elsewhere. There was jobs growth in Ireland in the 1992-2002 period, when the Irish economy began to more closely resemble other northern European economies. There there was a period 2002-2008 when Irish standards of living exceeded other northern European economies, my point was that this latter phase was hype and nothing to do with tax rates only to do with dysfunctional banking regulation and get rich quick activity by banks.

Quite simply, it is risible to say that Ireland is "screwing" other EU countries with lower unemployment than we have.

It's not really off the point no, the argument you made is that Ireland's growth was credit fueled. It was not, or at least not solely and it is a distinction that must be made or we get posts like aindriu80 & Manach that are well wide of any accuracy.

No what Europe is (still) annoyed with is the fact that we abolished the higher rate, not the lower one after being told that we can't have two rates of corporation tax. So they're talking crap and they know it. They set up the single market thinking it would benefit them, but we found a way to make it benefit us and they're not happy.

It's easy to forget that it wasn't a significant benefit between the time it was introduced in its current form (70s) and when FDI really started kicking off here in the late 80s/early 90s.

antoobrien

professore wrote: »

Come ON ! The employment growth was fuelled largely by the massive housebuilding splurge that went on and the economic spinoffs from that, and the throwing of money at everyone that the banks did. After the 2001 dotcom bust, activity in the IT sector was dead and only gradually recovered in the following years - and this was the most dynamic non building sector related industry at the time.

You got it backwards - the housing splurge started because of the increased employment due to the healthcare & pharma factories, IT etc in the 90s. The splurge didn't really get going until after the IT bubble went pop. Completions went from 22,064 in 92 to 57,295 in 01 on the back of the employment growth that was already happening. The splurge start then with 68,419 in 03, 77,425 in 04, 80,557 in 05 & 93,019 in 06. The rate of jobs growth was fairly flat over that period of time, so as IT fell off in 2001 and after then construction took over - which is borne out by the competeions figuresl.

professore wrote: »

I remember thinking "I don't know where this money is coming from?" at the time.

There was silly money being thrown at IT & Pharma at the time. I remember a graduate recruitment fair in 2000 where BOI & AIB were laughed out of the hall for offers of £23,500 (€29,845) for a starting salary. Anyone with a couple of years of experience was usually getting at least 50% more than that. The money came because they were in "safe" jobs with high salaries - sound familiar?

PRAF

Scofflaw wrote: »

Titbit from Brian Lucey, who has apparently been at a conference in Frankfurt, talking to bankers, central bankers and banking academics:



http://brianmlucey.wordpress.com/2013/02/03/anglo-a-view-from-europe/

That would be uncomfortable for us, and immediately so for the government, who appear at this stage to be pinning not just much of their reputation on a deal for the PNs, but the stability of the coalition as well.

As to the accuracy of the views relayed, we can't of course know from what Lucey says exactly who was saying that, whether they have any input into the official lines that will be taken, how strongly they hold those opinions, and to what extent it's Lucey's interpretation, but still, straws in the wind.

cordially,
Scofflaw

The next 12 months (particularly the next 2) will be crucial for Ireland.

The statements issued some time ago regarding the de-coupling sovereign and banking debts was welcome. Similarly, an acknowledgement of Ireland's special case was also welcome (presumably reflecting how Ireland took one for the team by not allowing any of its Banks to fail in an uncontrolled manner).

What we are now seeing is bureaucratic intransigence and some elements from within our EU partners trying to screw us on the details of those statements. I'm hopeful that Noonan & co will get us a reasonable deal on both the promissory notes and also the banking bailout.

If not, we should take the B**tards to court!

Scofflaw

PRAF wrote: »

The next 12 months (particularly the next 2) will be crucial for Ireland.

The statements issued some time ago regarding the de-coupling sovereign and banking debts was welcome. Similarly, an acknowledgement of Ireland's special case was also welcome (presumably reflecting how Ireland took one for the team by not allowing any of its Banks to fail in an uncontrolled manner).

What we are now seeing is bureaucratic intransigence and some elements from within our EU partners trying to screw us on the details of those statements. I'm hopeful that Noonan & co will get us a reasonable deal on both the promissory notes and also the banking bailout.

If not, we should take the B**tards to court!

Ireland didn't take one for the team with its bank rescues - it took one for itself. I appreciate it's a nice idea that we somehow saved Europe, but it's not even slightly close to the truth. We did come quite close to messing it up for everyone back at the start, though, and our IFSC is heavily involved in other countries' banking problems, which might explain their reluctance to pay our bank rescue bill for us.

Still, we can hope their need for a success story is larger than their appreciation of our part in their downfall.

cordially,
Scofflaw

PRAF

Scofflaw wrote: »

Ireland didn't take one for the team with its bank rescues - it took one for itself. I appreciate it's a nice idea that we somehow saved Europe, but it's not even slightly close to the truth. We did come quite close to messing it up for everyone back at the start, though, and our IFSC is heavily involved in other countries' banking problems, which might explain their reluctance to pay our bank rescue bill for us.

Still, we can hope their need for a success story is larger than their appreciation of our part in their downfall.

cordially,
Scofflaw

So we were allowed to burn the bond holders in aib, boi, and Anglo then?

Iirc we were prevented from doing this on threat of having supply cut off from us by the ECB. This saved French, German, British, and US senior bond holders from getting significant haircuts on their assets, stopped the contagion effect on European banks, and cost us a bloody fortune.

Sand

PRAF wrote: »

So we were allowed to burn the bond holders in aib, boi, and Anglo then?

Iirc we were prevented from doing this on threat of having supply cut off from us by the ECB. This saved French, German, British, and US senior bond holders from getting significant haircuts on their assets, stopped the contagion effect on European banks, and cost us a bloody fortune.

I think Scofflaw is overcompensating for the commonly repeated viewpoint that "Ireland took one for the team" back in 2008 which is self serving historical revisionism.

Its quite true to say that Ireland took one for itself (or at least what the assembly of morons comprising Official Ireland perceived as being for itself) but its too much to deny that our Eurozone brethren didn't benefit from the decision made. Certainly any talk of imposing losses to reduce the burden on Irish taxpayers was completely ruled out by the ECB in 2010 - probably illegally. And lets face it - if the rule of thumb was "Save your banks" whilst avoiding contagion then any plan put together back in September 2008 with Eurozone signoff would have looked almost exactly like the one Ireland carried out itself.

The Eurozone didn't have any alternative to national bank rescues to offer back then, and it still doesn't 5 years later.

PRAF

Sand wrote: »

I think Scofflaw is overcompensating for the commonly repeated viewpoint that "Ireland took one for the team" back in 2008 which is self serving historical revisionism.

Its quite true to say that Ireland took one for itself (or at least what the assembly of morons comprising Official Ireland perceived as being for itself) but its too much to deny that our Eurozone brethren didn't benefit from the decision made. Certainly any talk of imposing losses to reduce the burden on Irish taxpayers was completely ruled out by the ECB in 2010 - probably illegally. And lets face it - if the rule of thumb was "Save your banks" whilst avoiding contagion then any plan put together back in September 2008 with Eurozone signoff would have looked almost exactly like the one Ireland carried out itself.

The Eurozone didn't have any alternative to national bank rescues to offer back then, and it still doesn't 5 years later.

Exactly, so lets take those ECB buggers to court if they don't cut us some slack! And I'm only half joking here. We should at least threaten to do so if these negotiations don't go well

Scofflaw

Sand wrote: »

I think Scofflaw is overcompensating for the commonly repeated viewpoint that "Ireland took one for the team" back in 2008 which is self serving historical revisionism.

Thanks, Sand - yes, it's sort of a reflex at this stage.

Sand wrote: »

Its quite true to say that Ireland took one for itself (or at least what the assembly of morons comprising Official Ireland perceived as being for itself) but its too much to deny that our Eurozone brethren didn't benefit from the decision made. Certainly any talk of imposing losses to reduce the burden on Irish taxpayers was completely ruled out by the ECB in 2010 - probably illegally.

Unlikely to have been illegal - if it were, someone somewhere would have challenged it. Nor am I particularly sold on the notion that the Irish government suddenly wanted to change tack in late 2010 after two years making sure everyone got 100%, because if you leave aside everything said for a moment, and look at what happened, you have to note that up to our bailout and the ECB's intervention we paid off every single bondholder whether senior or junior, and after that we continued to pay off the seniors and burned the junior bondholders pretty stiffly.

Added to that, we have the reports form the negotiations, which repeatedly say that the Irish government sided with the ECB - not "argued against it and then gave in", but "sided with it" in response to the IMF's suggestions of bondholder burning. "Stockholm syndrome" was an IMF insider's description of it, I believe.

That suggests to me that the Irish government didn't change tack, but hoped, albeit briefly, that someone else could be got to take responsibility for burning senior debt, leaving us with clean hands, innocent expressions, and lower debts.

Sand wrote: »

And lets face it - if the rule of thumb was "Save your banks" whilst avoiding contagion then any plan put together back in September 2008 with Eurozone signoff would have looked almost exactly like the one Ireland carried out itself.

The Eurozone didn't have any alternative to national bank rescues to offer back then, and it still doesn't 5 years later.

There was in fact an agreed set of measures announced about 12 days after the Irish guarantee. They too were actually national measures, of course, because the eurozone had no mechanism for doing anything with banks - a part of its total lack of any crisis managements planning whatsoever.

cordially,
Scofflaw

antoobrien

PRAF wrote: »

So we were allowed to burn the bond holders in aib, boi, and Anglo then?

Yes we were, junior bondholders got royally screwed.

Senior bondholders, which rank above retail deposits didn't get hit, but especially in the case of Anglo - they were a small part of the problem so hitting them was unjustifiable given the lack of any real benefit vs the reputational damage it would have done to Ireland.

PRAF

Re the illegality of the ECB actions, that is a matter for the appropriate courts to decide should it ever be raised with them. I haven't researched it in detail and I don't have any insider information on it but my recollections, from reading press reports and also books such as Matt Coopers, are that the ECB may well have acted outside its remit in coercing Ireland into paying all of the bondholders in full. Others who know more about it than I do, e.g. Colm McCarthy, also seem to think there is a case to answer. Others still, e.g. Brian Lucey, suggest we should threaten to tie the ECB up in a legal quagmire regardless of whether we win it or not.

Re the morality of it, to me it is fundamentally wrong that Ireland was unable to secure greater bondholder participation in the costs of the banking catastrophy. I find it incredible that Ireland did not push for greater bondholder participation. Indeed, Lenihan seemed to indicate this himself before his untimely death.

Lets hope for Ireland's sake that we do get a good deal on the prom notes and also on the banking debt. Regardless of the legal or moral arguments, there is a fundamental need for the EU to see a success story. Ireland simply must get debt sustainability if we are to escape an endless and ultimately fruitless pursuit of austerity.

PRAF

antoobrien wrote: »

Yes we were, junior bondholders got royally screwed.

Senior bondholders, which rank above retail deposits didn't get hit, but especially in the case of Anglo - they were a small part of the problem so hitting them was unjustifiable given the lack of any real benefit vs the reputational damage it would have done to Ireland.

For me the real problem was nationalising Anglo. We should've let it go bust. We shouild have let Irish Nationwide go with it as well. IMO they were not systemically important and I have yet to see any real evidence to the contrary.

Of course, ordinary retail depositors should have been reimbursed for any deposits covered under the Deposit Guarantee Scheme. However, all shareholders and bondholders should have been totally wiped out. That's capitalism folks, well that's how it should have worked anyway

Scofflaw

PRAF wrote: »

Re the illegality of the ECB actions, that is a matter for the appropriate courts to decide should it ever be raised with them. I haven't researched it in detail and I don't have any insider information on it but my recollections, from reading press reports and also books such as Matt Coopers, are that the ECB may well have acted outside its remit in coercing Ireland into paying all of the bondholders in full. Others who know more about it than I do, e.g. Colm McCarthy, also seem to think there is a case to answer. Others still, e.g. Brian Lucey, suggest we should threaten to tie the ECB up in a legal quagmire regardless of whether we win it or not.

And none of them really do their credibility much good with the suggestions, since in every case there, they seem unable to tell us what the illegality actually comprises. The ECB seems to have required full payment of those bondholders remaining at the time of the bailout as a quid pro quo for their emergency support of Irish banks, and I doubt such conditionality is illegal.

PRAF wrote: »

Re the morality of it, to me it is fundamentally wrong that Ireland was unable to secure greater bondholder participation in the costs of the banking catastrophy. I find it incredible that Ireland did not push for greater bondholder participation. Indeed, Lenihan seemed to indicate this himself before his untimely death.

That's an odd argument, because it was Lenihan himself who protected the bondholders and ensured they would be paid off in full through the guarantee. And how does the moral argument for burning bondholders apply to bondholders who were available for burning after the expiry of the guarantee - were they even the same people who are supposed to have profited by investing in the banks in their heyday?

PRAF wrote: »

Lets hope for Ireland's sake that we do get a good deal on the prom notes and also on the banking debt. Regardless of the legal or moral arguments, there is a fundamental need for the EU to see a success story. Ireland simply must get debt sustainability if we are to escape an endless and ultimately fruitless pursuit of austerity.

People appear to be consistently amazed that despite first "having the eurozone over a barrel", then "having been illegally screwed by Europe", and now "having paid most to save Europe", we seem to make little headway in our arguments in Europe - they shouldn't be, though, because every single one of those claims is self-serving codology. In fact, the government has one card to play, which is that everyone would like to see a PIIGS rescue story - but they're still fighting an uphill battle, because from the rest of Europe's perspective, we provided a 'Wild West' for their banks to make messes they have to pay for, got burnt by letting our own banks do the same, and then when our banks went pear-shaped, tried to pull off a stroke that further destabilised everyone else's banks by sucking deposits into ours, forcing their governments into expensive defensive guarantees.

cordially,
Scofflaw

antoobrien

PRAF wrote: »

For me the real problem was nationalising Anglo. We should've let it go bust. We shouild have let Irish Nationwide go with it as well. IMO they were not systemically important and I have yet to see any real evidence to the contrary.

20:20 hindsight. One must remember than in September 2008 we had seen 6 major (multi billion) financial companies go under before Anglo - the biggest of which was Lehmans. When Lehmans went under it nearly took the GE with it. Remember that while GE has a financial arm, it is the 3rd biggest firm in the world. For a few days after Lehmans went under the various manufacturing arms of GE couldn't get credit and were seriously worried that they wouldn't be able to fulfil customer orders.

Would it have been wise to be seen to risk the same with Anglo? Hell no.

PRAF wrote: »

Of course, ordinary retail depositors should have been reimbursed for any deposits covered under the Deposit Guarantee Scheme. However, all shareholders and bondholders should have been totally wiped out. That's capitalism folks, well that's how it should have worked anyway

You are forgetting/ignoring the fact that the money backing up bonds are often retail deposits and pension funds, so in effect bondholders are depositors, so you're contradicting yourself there.

Btw capitalism did work - the shareholders of all the financial institutions were totally wiped out.

PRAF wrote: »

books such as Matt Coopers

I've read matt coopers book - it's a sop to the "not our fault" brigade and totally ignores that the Irish public willingly bought into the property boom.

PRAF

From McCarthy, "[the ECB] pursued policies towards Ireland which resulted in the prevention of burden-sharing with unguaranteed bondholders of bust Irish banks, in defiance of the wishes of the Irish government and against the advice of the International Monetary Fund.

ECB officials have since acknowledged that the 100 per cent payouts to these lucky bondholders by the Irish Exchequer helped to prevent contagion not merely to the surviving Irish banks but also to the wider eurozone banking system"

He also states the following (to which UCD's Karl Whelan also agrees) "the ECB has never been conferred with an explicit power to force 100 per cent compensation of unsecured bondholders in bust banks on to the national governments. Had such an explicit power been included in the ECB's initial design, nobody would have agreed to it. Countries which stayed out of the euro (Denmark is an example) have been able to impose haircuts on senior bank bondholders as they saw fit"

To be fair, he doesn't say that there is definitely illegality. However, he suggests that there is enough doubt about its legality to raise a case with the European Court of Justice. IMO we should get a legal opinion on it and potentially use that opinion (presuming it is favourable) as a negotiating tactic with the ECB.

Re Anglo's systemic importance - I disagree. It should have been let go. It was never considered to be anything other than a developers bank. The decision to nationalise it was one of the worst decisions ever taken in the history of the state

PRAF

Scofflaw wrote: »

And none of them really do their credibility much good with the suggestions, since in every case there, they seem unable to tell us what the illegality actually comprises.

The illegality stems from them acting outside their mandate / Ultra vires. If their specific actions were ultra vires then the legality of their actions is in question

Scofflaw wrote: »

..it was Lenihan himself who protected the bondholders and ensured they would be paid off in full through the guarantee. And how does the moral argument for burning bondholders apply to bondholders who were available for burning after the expiry of the guarantee - were they even the same people who are supposed to have profited by investing in the banks in their heyday?

The guarantee was an emergency measure designed to prevent the utter obliteration of the entire financial system in Ireland. Without it, quite simply there would have been no money in the ATMs and quite possibly some form of doomsday scenario in terms of public disorder. It was a necessary evil.

The next bit of the strategy, i.e. calling all the bondholders into a room and negotiating how many cents in the euro they would get back, was never acted upon. Mostly this was government ineptitude (thinking we had a liquidity rather than a solvency problem), intransigience (Lenihan & co probably hoped it would never come to that), and a forlorn hope that things would magically improve over the course of the guarantee period.

I do not believe that Lenihan & co ever acted specifically to protect bondholders because they thought it was the right thing to do. They only did it because they (incorrectly) thought it was the best thing for Ireland to do at the time.

Once Lenihan realised the extent of the problems, he tried to burn the senior bondholders but was prevented from doing so by the ECB. The effect of this was to force Irish citizens to pay for the poor investment decisions of private organisations. I do not understand how this can be conceived of as anything other than immoral.

Scofflaw wrote: »

People appear to be consistently amazed that .... "having been illegally screwed by Europe", and now "having paid most to save Europe", we seem to make little headway in our arguments in Europe - they shouldn't be, though, because every single one of those claims is self-serving codology.

I disagree that the above is self-serving codology. The ECBs actions were quite possibly illegal and the legality of their actions should be investigated. Taking this course of action is risky of course and should be considered a last option.

I also disagree that we did go above and beyond the call of duty as regards paying off bondholders. The alternative course of action, as followed by Denmark and Iceland, would have been to negotiate steep haircuts with our (mostly European) bondholders which could have caused chaos in their banking systems and prevented this debt from being shouldered by Irish taxpayers.

You seem to be arguing that Joe Taxpayer in Ireland is rightfully stuck with the full extent of those debts. We'll have to agree to disagree on that one. What are the supposed sins of the Irish people that we are stuck with this - incompetence for voting for Fianna Fail?

Scofflaw

PRAF wrote: »

The illegality stems from them acting outside their mandate / Ultra vires. If their specific actions were ultra vires then the legality of their actions is in question

That would be so - but the ECB's mandate is pretty clearly set out in the treaties, so it should be pretty open and shut to make this case. Yet not only has nobody taken such a case to court, nobody has actually made such a case at all. What they have done, as McCarthy's quote shows, is suggest that in some way the absence of a specific power to "force bondholder repayments against a government's wishes" means the ECB acted illegally.

Such a case requires several things - first, a premise that the ECB can only legally do what it has explicitly been given the power to do; second, evidence that the Irish government genuinely wished to burn the senior bondholders; and third, that the ECB prevented that happening by instruction rather than agreement.

Of these, the first is generally not held to be the case - the ECB has a mandate to achieve euro stability, and as long as its actions were in line with that mandate they're probably going to be found to be necessary actions. And that's kind of handy, since, as far as I know, they had no explicit power or requirement to support the Irish banks to the extent they did.

The second is the strongest plank, but still arguable in my opinion, since the available evidence seems to show the Irish government agreeing with the ECB once the ECB had disagreed with the IMF. I accept that this is purely my personal take, but what I see is that the Irish government would have been very happy to be publicly told by the IMF that they "had" to burn senior bondholders, but the moment that was no longer an option, they were no longer interested.

The third point appears to me to be the weakest of the three, because there isn't any record that the ECB instructed the Irish government not to burn senior bondholders. Instead, the government seem to have accepted the ECB's preferences for not burning remaining senior bondholders in exchange for the exceptional levels of ECB support being provided for the Irish banks. Since there's a quid pro quo there, the second plank of the argument also disappears - the Irish government may have preferred to burn senior bondholders, but they preferred over that continuing and exceptional ECB support for the banks.

PRAF wrote: »

The guarantee was an emergency measure designed to prevent the utter obliteration of the entire financial system in Ireland. Without it, quite simply there would have been no money in the ATMs and quite possibly some form of doomsday scenario in terms of public disorder. It was a necessary evil.

The next bit of the strategy, i.e. calling all the bondholders into a room and negotiating how many cents in the euro they would get back, was never acted upon. Mostly this was government ineptitude (thinking we had a liquidity rather than a solvency problem), intransigience (Lenihan & co probably hoped it would never come to that), and a forlorn hope that things would magically improve over the course of the guarantee period.

I'm not sure that makes sense - you cannot on the one hand guarantee all creditors, which was what the guarantee effected, and on the other negotiate with those creditors to write down their debt! The debt is either guaranteed - that is, the Irish government is guaranteeing to pay it in full - or it isn't. It can't be both.

PRAF wrote: »

I do not believe that Lenihan & co ever acted specifically to protect bondholders because they thought it was the right thing to do. They only did it because they (incorrectly) thought it was the best thing for Ireland to do at the time.

Once Lenihan realised the extent of the problems, he tried to burn the senior bondholders but was prevented from doing so by the ECB. The effect of this was to force Irish citizens to pay for the poor investment decisions of private organisations. I do not understand how this can be conceived of as anything other than immoral.

Easily - because it's not what happened. It's not a case of Lenihan realising at the expiry of the guarantee that the problems were greater than he had envisaged - the bonds were in the main already paid off under the guarantee! Meanwhile, some of those bonds that were available for burning after the guarantee expired must have been bonds that had been taken up in good faith during the course of the guarantee - burning those bondholders still willing to put money into the banks once they had already been seen to be in trouble doesn't strike me as particularly moral, particularly given this:

Date|Irish owned bonds|%|Eurozone owned|%|ROW owned|%
September 2008|23,573 |24.29|14,295 |14.73|59,185 |60.98
September 2010|35,545 |51.91|10,225 |14.93|22,706 |33.16
November 2010|34,418 |52.58|10,090 |15.41|20,952 |32.01

Table: bondholdings in the covered banks, by geographic area. Source: CBI consolidated banking stats.

Over the period of the guarantee - September 2008 to September 2010 - there has clearly been a major change in the ownership of bonds. Irish bondholdings have increased by €12bn, eurozone bonds have decreased by €4bn, and rest of world bondholdings have shrunk massively by €36.5bn.

Any moral argument in favour of burning bondholders who profited from our bubble is largely irrelevant in September 2010, let alone two months later at the point where the ECB is insisting on honouring the remaining bonds. That argument applied primarily to the foreign bonds, which have fled the banks by then to the tune of €42bn, all paid in full under the terms of the guarantee. I don't see how it applies to the new bondholdings who have come on board in a move that actually supported the banks and reduced their recap needs!

The basic argument in favour of burning bondholders, as opposed to burning depositors, as the Icelanders did (and from their perspective, that is what they did, leaving the UK and Dutch governments to cover, and still leaving depositors out of pocket), is very simple - bondholders can't move as fast. A bond is only repaid on maturity, so you have until then to decide you're not going to repay it in full. Most of the "moral" arguments draw shaky and illogical distinctions between bondholders and depositors, but the real difference is simply ease of targeting.

PRAF wrote: »

I disagree that the above is self-serving codology. The ECBs actions were quite possibly illegal and the legality of their actions should be investigated. Taking this course of action is risky of course and should be considered a last option.

It is more likely just a waste of time, to be honest.

PRAF wrote: »

I also disagree that we did go above and beyond the call of duty as regards paying off bondholders. The alternative course of action, as followed by Denmark and Iceland, would have been to negotiate steep haircuts with our (mostly European) bondholders which could have caused chaos in their banking systems and prevented this debt from being shouldered by Irish taxpayers.

As you can perhaps see from the table above, the records don't show our banks as having "mostly European" bondholders, or rather not eurozone ones.

PRAF wrote: »

You seem to be arguing that Joe Taxpayer in Ireland is rightfully stuck with the full extent of those debts. We'll have to agree to disagree on that one. What are the supposed sins of the Irish people that we are stuck with this - incompetence for voting for Fianna Fail?

Well, "rightfully" is a funny word - it suggests (and people do suggest) that I think it's somehow "fair", or a "good thing", and something we shouldn't try to get out of, which as an Irish taxpayer I very definitely don't. What I do think is that for all the mumbling about illegality this and unfairness that, the evidence seems to show beyond reasonable doubt that the whole thing was done legally by a legally constituted Irish government, and according to the laws, statutes and powers of the various bodies involved. And indeed that we took it on, not to "save the euro" for everyone else's benefit, but to save our banking system for our benefit.

And so, as such, yes, we're legally stuck with the debt unless we can provide good reasons for other people helping us out, and provide ways that allow the other bodies involved to help us lighten the burden without breaking their rules. Our best bet, it seems to me, is the general need for a peripheral success story - our worst bet is pretending we did it all for the people we're negotiating with and at their insistence, when they know perfectly well that's not true.

cordially,
Scofflaw

Sponge Bob

I do agree with Scofflaws point that the time to 'burn the bondholders' was in September 2008 not September 2010 or at/after bailout time in December 2010. Which means the guarantee ...or at least the wider extent of it...was the problem.

What I find odd is the lack of public discussion on ECB actions taken to ensure EZ stability in the period from around May to September 2008 after Bear Stearns collapsed ( or indeed from c.September 2007 to September 2008) and how Ireland finally ended up on point duty to save the Global Financial System from a rolling crash in September 2008 just after Lehmans. That was the year when the standard wittering was tha Ireland did not do sub prime lending .

Lehmans was only one of a series of failures, many sub prime operations ( eg not GE Capital but its ilk) had gone in the previous year.

Scofflaw

Scofflaw wrote: »

It is more likely just a waste of time, to be honest.

Agreed, and possibly worse than just a waste of time. I'd think long and hard before getting into a legal dispute with institutions while at the same time expecting them to continue to fund my operations.

If Ireland can't get an acceptable deal on the PNs, what happens (from a political as well as financial perspective) if the Irish government says something along the lines of "Fair enough, but we can't pay, so with that in mind........ ........can we have another bailout please?"

Sponge Bob

We will be in more trouble with the markets if we don't play hardball having talked ourselves right into it.

Some time on the night of the 30th of March in traditional EU last minute style we should get.

1. Term extension
2. Big reduction in annual payments to around €7-900m
3. No writeoff.

Most improtantly, a new name for the Promissory notes not containing the words promissory or note. From the plane Big Mig will wave a scrap of paper promising solvency in our time.

My prediction anyway.

PRAF

Sponge Bob wrote: »

We will be in more trouble with the markets if we don't play hardball having talked ourselves right into it.

Some time on the night of the 30th of March in traditional EU last minute style we should get.

1. Term extension
2. Big reduction in annual payments to around €7-900m
3. No writeoff.

Most improtantly, a new name for the Promissory notes not containing the words promissory or note. From the plane Big Mig will wave a scrap of paper promising solvency in our time.

My prediction anyway.

That would be a decent outcome in my opinion. Cash is king and that would be a saving in cash terms of over €2b a year when we need that money very, very badly.

Whether we get it by Scofflaws argument (the EU needs a success story and Ireland cannot be a success unless we get a deal), McCarthy & Luceys argument (some of these debts were forced upon us illegally), or any other argument is irrelevant. Our govt just needs to get it for us ASAP

I'm firmly convinced that solving this issue, making inroads into the personal insolvency problem, and a deal on the other banking debts in AIB & BoI are absolutely critical to getting Ireland's economy growing again.

Once we solve these issues, we potentially have a virtuous circle of increased stability, increased investor & consumer confidence, increased economic activity, more jobs, increased economic activity, more taxes, more govt spending, more jobs, etc......

Sponge Bob

PRAF wrote: »

Twe potentially have a virtuous circle of increased stability, increased investor & consumer confidence, increased economic activity, more jobs, increased economic activity, more taxes, more govt spending, more jobs, etc......

Another way of looking at it is that we WERE going to take €9.7bn out of the economy this year ( incl €6.2bn of emergency borrowing) which would be a killer at a time when the EZ needs to show that the Koolaid can work.

€3.5bn budget adjustments ( €2.25bn spending reduction+€1.25bn Tax Hikes)
€3.1bn 2012 Promissory to BoI
€3.1bn 2013 Promissory

Most of that in H1 2013 and also programmed to do

€3.1bn budget adjustments
€3.1bn 2014 Promissory

This time next year. And not counting deficit borrowing.

We have 2 years worth of promissories maturing in March 2013

PRAF

At least the people have got their justice:
- Illegal and quasi-fraudulent activity in Banks identified, perpetrators put in jail, etc.
- Regulatory failures identified and non-performing / incompetent management sacked
- Political leaders in the 2002-2010 period called to account for their role in the crisis in a public inquiry

Actually, wait a minute, none of that has happened.....:mad:

Well, at least the people have learned from their mistakes and the Fianna Fail party has been marginalised to the point of non-existence. Actually, wait a minute, FF are actually quietly regaining the position as the most popular political party in Ireland :mad::mad:

Well at least there are now controls in place to prevent another property bubble arising. All property tax inventives have been removed, strict rules based lending policies imposed on Banks re mortgages, site value tax in place to prevent the hoarding of land and the receipt of speculative gains from same, insolvency service up and running and keeping banks on their toes. Well actually.........:mad::mad::mad:

Will we ever learn?

Bullseye1

It's still a fact that FF while in government made one of the biggest decisions that any government has made since the foundation of the state. A decision that will impact this country for generations. Nationalising Anglo has placed private debt on the Irish people.

1. Should Anglo have been allowed to fail, ala Lehman Brothers? I believe they should have been.

2. Did the ECB or Europe put pressure on FF to bail out Anglo?

Scofflaw

Bullseye1 wrote: »

It's still a fact that FF while in government made one of the biggest decisions that any government has made since the foundation of the state. A decision that will impact this country for generations. Nationalising Anglo has placed private debt on the Irish people.

1. Should Anglo have been allowed to fail, ala Lehman Brothers? I believe they should have been.

They should have been, but (and this is important) there was no legal mechanism in Ireland for a bank to fail, and no appreciation in the government of how big the problems in Anglo were.

Bullseye1 wrote: »

2. Did the ECB or Europe put pressure on FF to bail out Anglo?

None has been found, not even a sniff, in all the investigations. On the contrary, Lenihan and Europe were both very clear at the time that this was an Irish solution for Ireland, and extremely unpopular in Europe.

cordially,
Scofflaw

Sponge Bob

Scofflaw wrote: »

None has been found, not even a sniff, in all the investigations

Not even a view on the collapse of WestLB and Depfa** over the previous year and the desirability of not repeating it????

**thanks to the antics of these 2 German banks in the IFSC.

They were the largest bank collapses in Europe over the year or so before Lehmans went ....then Anglo.

Scofflaw

Sponge Bob wrote: »

Not even a view on the collapse of WestLB and Depfa** over the previous year and the desirability of not repeating it????

**thanks to the antics of these 2 German banks in the IFSC.

They were the largest bank collapses in Europe over the year or so before Lehmans went ....then Anglo.

What relevance would they have to evidence of ECB involvement in the Guarantee or in Anglo? Even had they been before rather than slightly after the Guarantee (October 2008 Depfa, November 2008 WestLB), it's hard to see what possible relevance they might have had, given a 100% lack of evidence for the ECB even knowing in advance of the Guarantee, let alone exerting some pressure to make it happen!

puzzled,
Scofflaw

PopeBuckfastXVI

Scofflaw wrote: »

None has been found, not even a sniff, in all the investigations.

I can't help thinking the 'Europe made us do it' li(n)e was concocted in some FF strategy think tank. It certainly helps with their rehabilitation, if nothing else.

In fact I'd swear I heard someone claim it was the ECB in cahoots with FG/Labour at one point...

Sponge Bob

There were external pressures in september 2008 to avoid a domino effect from WestLB/Depfa/Bear Stearns/Lehmans. The question is whether these were explicit ( eg Trichet ringing up Lenihan saying no banks will be allowed to fail in the EZ) or whether they were internalised (as in everyone knew without saying it that bank failures should be avoided and Ireland was first in the firing line after Lehmans)

scofflaw wrote:

What relevance would they have to evidence of ECB involvement in the Guarantee or in Anglo? Even had they been before rather than slightly after the Guarantee (October 2008 Depfa, November 2008 WestLB), it's hard to see what possible relevance they might have had, given a 100% lack of evidence for the ECB even knowing in advance of the Guarantee, let alone exerting some pressure to make it happen!

There is no dount that Trichet et al did not want a disorderly failure in the EZ such as what happened in Iceland a few week later and in Ireland case we should have let them all go bar one ( probably Bank of Ireland) as we know now.

But that would have set a precedent which would have roiled the EZ and led to Dexia/Belgian banks going at the same time as Iceland etc. Dexia was bailed out a few weeks after our guarantee.

But we are agreed I take it that events leading to the troika takeover in late 2010 are even less relevant...are we????

Scofflaw

Sponge Bob wrote: »

There were external pressures in september 2008 to avoid a domino effect from WestLB/Depfa/Bear Stearns/Lehmans. The question is whether these were explicit ( eg Trichet ringing up Lenihan saying no banks will be allowed to fail in the EZ) or whether they were internalised (as in everyone knew without saying it that bank failures should be avoided and Ireland was first in the firing line after Lehmans)

There is no dount that Trichet et al did not want a disorderly failure in the EZ such as what happened in Iceland a few week later and in Ireland case we should have let them all go bar one ( probably Bank of Ireland) as we know now.

But that would have set a precedent which would have roiled the EZ and led to Dexia/Belgian banks going at the same time as Iceland etc. Dexia was bailed out a few weeks after our guarantee.

But we are agreed I take it that events leading to the troika takeover in late 2010 are even less relevant...are we????

I'm still not sure how those bank failures (West LB, Depfa, Dexia) that came after the guarantee are supposed to be relevant to a decision on the guarantee, let alone cause a domino effect when those dominoes had yet to fall, but we'll ignore that for the moment!

As to whether the pressure was explicit, the answer seems fairly clearly not. There's no mention in any of the reports of ECB pressure, and there's no mention in the media at the time of any ECB pressure, while the unpopularity of the guarantee and the 'economic nationalism' of it are very clear from people like Lenihan at the time:

Tuesday’s guarantee offered by the Irish government to its six national banks to safeguard €400bn ($563bn) of deposits and bank debt is causing ructions in Brussels, where there is concern the Irish move shatters any hope of pan-European regulatory response to the turmoil.

Brian Lenihan, finance minister, said he had notified the European Commission of the plan but “a member state is responsible for the stability of its own banking system and I am responsible for the stability of these particular banks.

“In the absence of a Europe-wide system, there is an onus on the Irish government as the sovereign body with responsibility in this state to take action.”

A few weeks ago, Mr Lenihan described it as his “misfortune” to become finance minister at a time when the domestic housing boom was “coming to a shuddering halt”.

On Tuesday, he conceded that Ireland might be accused of reverting to economic nationalism and ignoring pan-European solutions to the market turmoil.

He said: “I accept it is a tendency towards economic nationalism but we’re on our own here in Ireland and the government had to act in the best interests of the Irish people”.

http://www.ft.com/intl/cms/s/0/b514c10a-8f2e-11dd-946c-0000779fd18c.html

The reaction of the ECB to the guarantee is on record, too, including a sniffy comment regarding proper consultation:

As a further general comment, the ECB notes that the Irish authorities have opted for an individual response to the current financial situation and not sought to consult their EU partners. In view of the similarities of the causes and consequences of the current financial distress across EU Member States and the potential interdependencies of policy responses, it would have been advisable to properly consult other EU authorities on the envisaged legislative plans.

And I suppose one would have to say that if the "pressure" was "internalised", it again turns up in none of the documented discussions in the runup to the guarantee decision, where the ECB is not even mentioned as someone whose views are important, and it's again clear that the decision was so far over in the direction of 'economic nationalism' that whatever had been internalised, it certainly wasn't anything European.

I don't doubt there are some people who are going to go ahead and ignore both this contrary evidence and the complete lack of supporting evidence and believe this anyway, but there's nothing that can be done about some people.

cordially,
Scofflaw

Sponge Bob

So we know that there was no ECB game plan to deal with the next eruption ( wherever) and that Lenihan 'made it up' on the night.

scofflaw wrote:

I'm still not sure how those bank failures (West LB, Depfa, Dexia) that came after the guarantee are supposed to be relevant to a decision on the guarantee, let alone cause a domino effect when those dominoes had yet to fall, but we'll ignore that for the moment!

You might be a tad surer if you checked your dates, or then again maybe not.

Depfa already collapsed ( in 2007 in effect) and was taken over by Hypo and then its new parent Hypo Real Estate finally collapsed a week after Anglo after prolonged negotiations on refinance predating our guarantee failed.

West LBs effective collapse predated Anglos too. > http://www.spiegel.de/international/business/banking-crisis-germany-s-westlb-under-attack-from-brussels-a-577142.html

Sachsen LBs effective collapse predated Anglo > http://www.spiegel.de/international/business/subprime-aftershocks-saxony-state-bank-saved-from-possible-collapse-by-sale-a-523170.html

In the cases of Sachsen Depfa and West shenanigans in the IFSC were involved, sure Depfa had even redomiciled to the IFSC while the other two ran large and murky trading books out of there.

I think Dexia went after them around the same time as the Icelandic banks and that we we not involved in that one. It was the largest or second largest Belgian bank IIRC.

No pressure all the same.

Scofflaw

Sponge Bob wrote: »

So we know that there was no ECB game plan to deal with the next eruption ( wherever) and that Lenihan 'made it up' on the night.

That's certainly what Lenihan said. And the ECB can only offer liquidity to viable banks, it can't do recaps or rescues.

Sponge Bob wrote: »

You might be a tad surer if you checked your dates, or then again maybe not.

Depfa already collapsed ( in 2007 in effect) and was taken over by Hypo and then its new parent Hypo Real Estate finally collapsed a week after Anglo after prolonged negotiations on refinance predating our guarantee failed.

West LBs effective collapse predated Anglos too. > http://www.spiegel.de/international/business/banking-crisis-germany-s-westlb-under-attack-from-brussels-a-577142.html

Sachsen LBs effective collapse predated Anglo > http://www.spiegel.de/international/business/subprime-aftershocks-saxony-state-bank-saved-from-possible-collapse-by-sale-a-523170.html

In the cases of Sachsen Depfa and West shenanigans in the IFSC were involved, sure Depfa had even redomiciled to the IFSC while the other two ran large and murky trading books out of there.

I think Dexia went after them around the same time as the Icelandic banks and that we we not involved in that one. It was the largest or second largest Belgian bank IIRC.

Rechecking the dates produces the same answer - they all collapsed after the guarantee. As I said originally, though, so what either way?

Sponge Bob wrote: »

No pressure all the same.

I would imagine that the spectacle of banks in trouble around the world pressured Lenihan, sure, particularly once the Irish banks started coming round to him with long faces.

Other than that, what of all of it?

cordially,
Scofflaw

antoobrien

Sponge Bob wrote: »

Depfa already collapsed ( in 2007 in effect) and was taken over by Hypo and then its new parent Hypo Real Estate finally collapsed

When Depfa was bought out, was it a distressed sale? A 17% premium on the share price indicates that it was not a bad assets sale but a normal M&A acquisition.

Sponge Bob

As far as I know HRE were told to take it over by the Bundesbank.

The Sachsen LB collapse had much to do with €30bn of toxic poo they were carrying ( in the IFSC) in 2007.

http://www.irishtimes.com/newspaper/finance/2012/1113/1224326525034.html

Activities of about €30 billion were managed in off-balance sheet “conduits” named “Georges Quay” and “Ormond Quay”.

and

On August 17th, 2007, the bank was hit by the sub-prime wave washing over Europe. The report’s authors say the directors were “stunned and amazed” by the danger facing the bank. With a week to survive, other banks threw Sachsen LB a €17 billion lifeline. It was later sold off to the Landesbank Baden-Württemberg of Stuttgart.

And so Sachsen did not collapse in 2007 because of a €30bn pile of poo in the IFSC . It was in fact saved as were all the German banks who had hidden toxic rubbish in the IFSC.

And none of this German palaver would have any bearing on illquidity and funding problems affecting Irish banks in September 2008.

And the ECB would have had no view at all on ths stability of the German financial system in the period from July 2007 to September 2008 .

I'm glad thats clear!

K-9

Sponge Bob wrote: »

And so Sachsen did not collapse in 2007 because of a €30bn pile of poo in the IFSC . It was in fact saved as were all the German banks who had hidden toxic rubbish in the IFSC.

And none of this German palaver would have any bearing on illquidity and funding problems affecting Irish banks in September 2008.

And the ECB would have had no view at all on ths stability of the German financial system in the period from July 2007 to September 2008 .

I'm glad thats clear!

How does all that relate to the Lenihan quotes?

antoobrien

Sponge Bob wrote: »

As far as I know HRE were told to take it over by the Bundesbank.

You're going to have to do better than that. There's actual documentary evidence that the HRE takeover was normal M&A - the premium is in the expected range of payments.

Seriously it looks like you're trying to make evidence fit your theory with HRE/Defra.

Sponge Bob wrote: »

The Sachsen LB collapse had much to do with €30bn of toxic poo they were carrying ( in the IFSC) in 2007.

http://www.irishtimes.com/newspaper/...326525034.html

You're reaching there. There's nothing in that article to suggest that the bank actually collapsed in 2007, just that the trouble was recognisable - as it was to the covered banks here.

There are two telling pieces in there that you've missed.

The report describes these directors as “fair-weather pilots”, unaware of the massive risks in the bank’s balance sheet, they failed to change course as clouds gathered on global markets in 2007. Had they sold Sachsen LB sub-prime assets at the first sign of the looming storm, the report suggests, they could have saved the bank €114 million and financial ruin.

According to the report conducted over 19 months by Freshfields and Deloitte, Sachsen LB’s directors ignored the “gallop” of investors out of markets in 2007. While other German institutions were getting out of the market, the audit found that the Leipzig bank continued to invest.

I much prefer the ft coverage of it, it has actual dates and amounts not the usual tripe we get form the irish papers. On August 17th 2007:

The bank, which is based in and owned by the German state of Saxony, said the German savings banks association had stepped in and taken over a €17.3bn credit facility to a special investment fund, or conduit, that Sachsen LB had funded and managed

Scofflaw

K-9 wrote: »

How does all that relate to the Lenihan quotes?

It doesn't, but for some reason Sponge Bob is trying to make a claim about the ECB being involved in the guarantee decision, and there being no evidence at all for that, he's trying to make it out of inference and innuendo.

At some point, no doubt, he will unleash a statement to the effect that the ECB did have a view on the stability of the eurozone banking system, which will be entirely not a surprise, and then claim that his views are somehow thereby vindicated. Traditionally, this will be a statement by Smaghi during the course of a speech, although he will probably have to gloss over the issue that Smaghi doesn't mention Depfa et al.

The absence of evidence is thereby dealt with - the goalposts are moved onto the claim that the ECB had "views", and that's then taken as vindicating the original claim that there was therefore "pressure", despite the fact that there remains nothing connecting their "views" to any "pressure" in respect of the guarantee. That bit is covered by the traditional barstool "stands to reason, dunnit?" clause, with the complete lack of evidence being covered by tapping the side of the nose wisely to indicate that of course there would be no evidence of an international institution pressurising a sovereign government to take particular decisions.

Hilariously, the fact that "such things happen" is then proven by reference to the known application of pressure by the ECB in the course of the bailouts in 2010 - even though that rather obviously contradicts the "of course there would be no evidence" line, since the whole point is that we know them to have done it because of the evidence of them having done it.

In other words, standard methods of manufacturing myths out of nothing at all. Strictly, it's CT stuff, but it's also a live political claim, because it allows Fianna Fáil voters to exonerate Fianna Fáil from the guarantee decision, although I'm not ascribing that motive to Sponge Bob.

cordially,
Scofflaw

Sponge Bob

Scofflaw wrote: »

At some point, no doubt, he will unleash a statement to the effect that the ECB did have a view on the stability of the eurozone banking system, which will be entirely not a surprise, and then claim that his views are somehow thereby vindicated. Traditionally, this will be a statement by Smaghi during the course of a speech, although he will probably have to gloss over the issue that Smaghi doesn't mention Depfa et al.

OK. I'll accept your argument at face value.

The ECB had no view on the stability of the EZ banking system during the early stages of the financial crisis from July 2007 to September 2008 and therefore could not have communicated such to Ireland at any stage between July 2007 and September 2008.

What did Smaghi say and when during that time anyway, especially if it was entirely meaningless??.

Scofflaw

Sponge Bob wrote: »

OK. I'll accept your argument at face value.

The ECB had no view on the stability of the EZ banking system during the early stages of the financial crisis from July 2007 to September 2008 and therefore could not have communicated such to Ireland at any stage between July 2007 and September 2008.

What did Smaghi say and when during that time anyway, especially if it was entirely meaningless??.

I'd say the least you can do when making stuff up is your own research!

amused,
Scofflaw

Sponge Bob

Scofflaw wrote: »

I'd say the least you can do when making stuff up is your own research!

You brought Smaghi into it , apropos what I know not until you explain the Smaghi angle.

rumour

Curiously well timed thread!!

antoobrien

rumour wrote: »

Curiously well timed thread!!

Conspiracy theory time;)

rumour

I'm obviously not using all my budget here!!!