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Banking Tail wagging Government Dog ?

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  • 04-06-2013 12:41am
    #1
    AlekSmart
    Registered Users Posts: 14,005 ✭✭✭✭


    The news from the NTMA over the long weekend (how fortuitous) was,in the words of the late Emperor Hirohito upon hearing of the Hiroshima bomb..."Not necessarily to our advantage".

    http://www.irishtimes.com/business/sectors/financial-services/ntma-rate-cut-to-affect-interest-for-an-post-savers-1.1415165

    Am I misreading this if I take it that An Post was becoming too attractive a location for one's funds ?

    Am I further in error if I ask whether this meant An Post was becoming too successful in commercial terms ?

    Frankly when I read a line such as this,I begin to feel not a little nauseous......
    The move comes following calls from the banks in recent months for a reduction in An Post interest rate.

    Whilst I note the Banking sectors concerns here,I would also remain very wary of their motives....
    The Irish Banking Federation welcomed the decision to reduce rates: “The banking sector is interested in ensuring a broadly fair, competitive and level playing field on deposit rates as and between various institutions.”

    I personally,have always felt,that running down the traditional Post Office Savings Account in favour of potential customers being directed across the road into the welcoming embrace of an IBF member company was always questionable.

    This little bit of acquiscence on the part of the State,does little to quell my nausea....:o


    Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

    Charles Mackay (1812-1889)



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    #2
    Pete_Cavan
    Registered Users Posts: 6,744 ✭✭✭Pete_Cavan


    Given recent experience of what happens when savings institutions get into trouble, perhaps it is prudent to ensure none are disproportionately large, especially considering the products on offer here are state backed and An Post is a loss making company.


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    #3
    srsly78
    Registered Users Posts: 7,157 ✭✭✭srsly78


    Pete_Cavan wrote: »
    Given recent experience of what happens when savings institutions get into trouble, perhaps it is prudent to ensure none are disproportionately large, especially considering the products on offer here are state backed and An Post is a loss making company.

    An Post just acts as a shop front for state savings products.

    The huge advantage the state products have is no DIRT applies, how this is supposed to be conducive to a level playing field I have no idea.


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    #4
    Rightwing
    Closed Accounts Posts: 8,101 ✭✭✭Rightwing


    AlekSmart wrote: »
    The news from the NTMA over the long weekend (how fortuitous) was,in the words of the late Emperor Hirohito upon hearing of the Hiroshima bomb..."Not necessarily to our advantage".

    http://www.irishtimes.com/business/sectors/financial-services/ntma-rate-cut-to-affect-interest-for-an-post-savers-1.1415165

    Am I misreading this if I take it that An Post was becoming too attractive a location for one's funds ?

    Am I further in error if I ask whether this meant An Post was becoming too successful in commercial terms ?

    Frankly when I read a line such as this,I begin to feel not a little nauseous......



    Whilst I note the Banking sectors concerns here,I would also remain very wary of their motives....



    I personally,have always felt,that running down the traditional Post Office Savings Account in favour of potential customers being directed across the road into the welcoming embrace of an IBF member company was always questionable.

    This little bit of acquiscence on the part of the State,does little to quell my nausea....:o

    Banking = Government nowadays. Government owns 99%+ in a number of institutions.


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    #5
    antoobrien
    Registered Users Posts: 6,106 ✭✭✭antoobrien


    AlekSmart wrote: »
    Am I misreading this if I take it that An Post was becoming too attractive a location for one's funds ?

    The observation is true but a little simplistic and the amounts involved are too low to give it any great credence.

    The state savings bonds & accounts are considered debt raised by the government. As of 30th April there are €800m in state savings products accounted for as borrowings in the exchequer statements. Compare this to the household deposits in banks of €92bn and we're talking pretty small change really.

    Theses figures indicate the fact that the NTMA rates are (and have been for some time) more generous than the bank's offerings are more likely to be behind this decision than anything the IBF are saying.

    However it does make sense for the government to limit the state savings pot as it does reduce the capital pool available to the banks, meaning the government may have to find more money to fill any potential capital holes.


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