NAMA & the bank bailout???

lalababa

What happened in the bank bailout?
Banks x ,y & z had borrowed money from the market. They then gave loans out (mainly property). These loans became bad(the crash). These loans were 'sold' to NAMA at a reduced rate, and the difference was made up by the exchequer?
What other monies/bank debts to markets were paid by the exchequer?( Paid from a loan from the eu monetary fund)
What were the ends and outs?

the beer revolu

NAMA has made a considerable profit, as I'm aware.

weldoninhio

lalababa wrote: »

What happened in the bank bailout?
Banks x ,y & z had borrowed money from the market. They then gave loans out (mainly property). These loans became bad(the crash). These loans were 'sold' to NAMA at a reduced rate, and the difference was made up by the exchequer?
What other monies/bank debts to markets were paid by the exchequer?( Paid from a loan from the eu monetary fund)
What were the ends and outs?

Basically, any bad luck you have, poor investments you make, new taxes you have to pay et al is all the fault of De Bankers.

99nsr125

the beer revolu wrote: »

NAMA has made a considerable profit, as I'm aware.

No it hasn't

Boom_Bap

They got a tracker mortgage and sorted everything out.

the beer revolu

99nsr125 wrote: »

No it hasn't

Well, I guess the economist on the radio was wrong, so.

Geuze

lalababa wrote: »

What happened in the bank bailout?
Banks x ,y & z had borrowed money from the market. They then gave loans out (mainly property). These loans became bad(the crash). These loans were 'sold' to NAMA at a reduced rate, and the difference was made up by the exchequer?
What other monies/bank debts to markets were paid by the exchequer?( Paid from a loan from the eu monetary fund)
What were the ends and outs?

I'll keep it short.

Several large banks became insolvent, as the value of their assets (loans) fell a lot, well below their liabilities.

The Govt stepped in and guaranteed the liabilities of the banks.

It also spent huge sums re-capitalising six banks.

63-64bn was injected into banks in various ways: preference shares, ordinary shares, loans.

As a result, the State ended up owning much or all of six banks.

The existing shareholders were wiped out, more or less.

The bondholders, owning the bank senior bonds, were all repaid, as were all depositers.

The State has sold off some of its bank shareholdings since then.

ytpe2r5bxkn0c1

99nsr125 wrote: »

No it hasn't

Over €4 billion in profits.

Geuze

Remember that although NAMA has made a large surplus, yes, it bought the loans at huge discounts from the banks.

So the losses on the loans were recognised on the banks P&L.

So it not surprising that NAMA made a surplus, given that it bought assets so cheaply.

Deebles McBeebles

99nsr125 wrote: »

No it hasn't

https://www.irishexaminer.com/archives/2018/0728/opinion/when-a-35bn-profit-is-actually-a-40bn-loss-473058.html

valoren

1. Bank of Ireland goes to the EU money market and get's a €1bn loan paying a set amount of interest over a period of time.

2. It uses this money to invest by making loans to regular people to buy houses and to developers to build more houses. The interest charged will be substantially more than the interest they pay back on their own loan.

3. Property prices are rising, repayments are a doddle and all is well until....

4. The credit crisis which began with a sniffle with Northern Rock in the UK becomes full blown cancer when Lehman's collapses and crucially was allowed to collapse by the US government.

5. Inter bank lending is suffocated, many household name institutions fail or merge together. No one knows who is exposed to property due to head melting collateralization between institutions.

6. Ireland, experiencing a property bubble, is hit hard. Bank of Ireland have €1bn loaned out to people many of whom are likely to lose their jobs and default. Builders stop building because they can't access money to continue operating. It is folly to continue anyway as the cost/benefit ratio has evaporated with sinking house prices.

7. Valuations contract and Bank of Ireland is essentially bankrupt.

8. The government realizes that the societal impact of a day-to-day bank such as BOI going bankrupt is simply untenable, they guarantee deposits to avoid a bank run and also guarantee BOI's loan book. Bank of Ireland get's nationalised with the government taking a major stake in the bank so it can continue operating. They clap themselves on the back.

9. There is however the problem of them arranging this with Anglo, a specialised outfit who are fatally flaithúil with the extent of their property exposure and the criminal accuracy of their financial reporting of their liquidity. They are a bank who don't do day to day banking and are not pivotal. The decision to include Anglo in the bail out will ultimately lead to an intervention in late 2010 from the EU/ECB (who loaned the money initially!)/IMF...aka....the troika when the frightening financial exposure of and losses of the bank is revealed. Think of a parent agreeing to blindly go guarantor for all loans of their dear sons who have lost their jobs and shortly after signing the paper work you get frequent knocks on the door from the litany of loan sharks one of your sons borrowed tens of thousands from to fund his gambling addiction with and which the parent is now on the hook for.

10. NAMA is created to take that €1bn toxic loan book from BOI (with Anglo et al) and continues to service the debt owed on it. The idea being that in time valuations will rise to minimise the expense. Bank of Ireland will report these loans as losses and their market valuations take a hiding but it's a more palatable scenario than ceasing to exist as a working entity. Long term shareholders are wiped out, people who "filled their boots" on safe, liquid Irish banks also lose their investment. The decision was made by government so as not to burn the bondholders i.e. to deem the billion euro loan as effectively worthless. The analogy was a punter (the bond holder(s); the Investment banks who bought AAA bonds of ECB loans, who sold them to another investment bank and so on) putting on a large bet on a horse (BOI; Irish banks) then mid-way through the race they see that their horse is not only way behind but has actually stopped to take a dump yet after the race finishes they are ridiculously issued an IOU from the Irish government for the amount they initially gambled to their shock and bemusement. Zero sum games don't apply here.

11. With €1bn worth of toxic loans off their books, Bank of Ireland and their credit rating is more attractive allowing them to get access to money to continue operating and ultimately to escape nationalisation by buying back the governments shares and to continue as a separate entity while the government maintains a significant national debt for the foreseeable future (which is helped serviced by the Universal Social Charge). They issue government 'Treasury' bonds to get cash to continue servicing the debts of the Irish banks. Seeing local credit unions offering unsecured loans of up to €50,000 you shake your head and wonder when, not if, all of this will happen again.

Deebles McBeebles

Geuze wrote: »

So it not surprising that NAMA made a surplus, given that it bought assets so cheaply.

And sold them to any foreign investor they could find even cheaper.

lalababa

Irish national debt is 221 billion.
How much did ireland pay initially/ as of 2019 for the bailout ? And how much is it likely to recoup?
For example there is a figure 64Billion for the bailout, How much of this 64B will be recouped when NAMA and the Government shareholdings in the banks are eventually sold?
If the bailout cost 64B , where did the other 157B debt come from ? Is it all from Government defecit?

Padraig Mor

Deebles McBeebles wrote: »

https://www.irishexaminer.com/archives/2018/0728/opinion/when-a-35bn-profit-is-actually-a-40bn-loss-473058.html

The important bit:

When Nama was set up, it paid a highly discounted rate of about €32bn for loans that were previously worth €74bn.

Back then, Mr Daly and CEO Brendan McDonagh said they would pursue developers “to the end of the earth” for all of the money they owed.

Along the way, the story mysteriously changed — and changed dramatically.

It emerged that Nama was no longer chasing the full €74bn but rather only the €32bn it paid for it.

Overall, NAMA has made an enormous loss for the taxpayer and they've conveniently forgotten their original mission to get back the full value of the loans.

_blaaz

Grady Rapid Sportscast wrote: »

Over €4 billion in profits.

Has it made enough profit to cover the discounts it received when getting the loans??



Otherwise exclaiming it as profit making for the state is highly misleading

Deebles McBeebles

_blaaz wrote: »

Has it made enough profit to cover the discounts it received when getting the loans??



Otherwise exclaiming it as profit making for the state is highly misleading

Doubtful that Srameen is being intentionally misleading but rather is believing what he has been told by the government et al. Unfortunately most people are probably the same.

Fr_Dougal

In years to come one of the biggest tribunals the State has ever seen will focus on NAMA.

Millions of taxpayers money will be spent on it, and nobody will end up being accountable due to how NAMA was structured from the beginning. The findings will conclude that there was widespread corruption, and lessons will be learnt ...until the next time.

kneemos

_blaaz wrote: »

Has it made enough profit to cover the discounts it received when getting the loans??



Otherwise exclaiming it as profit making for the state is highly misleading

The assets took a massive drop. We're they to pay over the odds?

sbsquarepants

Grady Rapid Sportscast wrote: »

Over €4 billion in profits.

Yea, but profits is a very dubious term. Nama "profits" are profits in name only.

Say you owe me a hundred quid and can't pay me back, so you say here I have this watch it's worth 200 hundred quid, i'll give it to you for 50 and you can sell it.

I buy your watch and sell it for 100 quid. I've made 50 "profit" but I'm still 50 down on what you owed me to begin with.

Profit shmofit;)

_blaaz

kneemos wrote: »

The assets took a massive drop. We're they to pay over the odds?

Tax payers ended up paying for them in the end



Lads lapping nama making a profit,while forgetting/ignoring we funded their set up and provided the discount is very much a deficit of facts

Deebles McBeebles

kneemos wrote: »

The assets took a massive drop. We're they to pay over the odds?

They could have sold over the odds when prices began getting back to "normal". Instead it was all sold off on the cheap.

Bob Harris

Nama got assets for nothing and sold them. How could they not make a profit.

kneemos

Deebles McBeebles wrote: »

They could have sold over the odds when prices began getting back to "normal". Instead it was all sold off on the cheap.

Not NAMA's fault. They had a remit to get rid of everything by a certain date.

Assets were being turned around almost literally the next day for a massive profit though in fairness.

SEPT 23 1989

Mother of jaysus if that's profit I would hate to see a loss

Mad_maxx

lalababa wrote: »

What happened in the bank bailout?
Banks x ,y & z had borrowed money from the market. They then gave loans out (mainly property). These loans became bad(the crash). These loans were 'sold' to NAMA at a reduced rate, and the difference was made up by the exchequer?
What other monies/bank debts to markets were paid by the exchequer?( Paid from a loan from the eu monetary fund)
What were the ends and outs?

The corporate bonds of the banks were loaded onto the sovereign

Seperate matter from nama of course

Ulysses Gaze

Fr_Dougal wrote: »

In years to come one of the biggest tribunals the State has ever seen will focus on NAMA.

Millions of taxpayers money will be spent on it, and nobody will end up being accountable due to how NAMA was structured from the beginning. The findings will conclude that there was widespread corruption, and lessons will be learnt ...until the next time.

A stitch up by The Soldiers of Bankruptcy to bail out their developer and banking buddies. And it contained Anti-Whistleblower elements in it to hide the corruption too.

Even Joseph Stiglitz saw NAMA was just wilful squandering of taxpayer money.

Anyone thinking of voting The Soldiers of Bankruptcy just remember this. They are the ones that ****ed the county over.

Ipso

Ulysses Gaze wrote: »

A stitch up by The Soldiers of Bankruptcy to bail out their developer and banking buddies. And it contained Anti-Whistleblower elements in it to hide the corruption too.

Even Joseph Stiglitz saw NAMA was just wilful squandering of taxpayer money.

Anyone thinking of voting The Soldiers of Bankruptcy just remember this. They are the ones that ****ed the county over.

Still getting around 25% of the vote aren't they?

EmmetSpiceland

Geuze wrote: »

The bondholders, owning the bank senior bonds, were all repaid.

On the advice, and hard lobbying, of Peter Sutherland, if I’m not mistaken?

James Brown

weldoninhio wrote: »

Basically, any bad luck you have, poor investments you make, new taxes you have to pay et al is all the fault of De Bankers.

Basically, any bad luck you have, poor investments you make, new taxes you have will be covered by the tax payer, depending on who you are of course.
See AIB not paying tax on any profits for the next 30 years. And sure they deserve it god bless.

kneemos

Matt Barrett wrote: »

Basically, any bad luck you have, poor investments you make, new taxes you have will be covered by the tax payer, depending on who you are of course.
See AIB not paying tax on any profits for the next 30 years. And sure they deserve it god bless.

AIB is ours. It's being fattened up for sale.

kowloon

Fr_Dougal wrote: »

In years to come one of the biggest tribunals the State has ever seen will focus on NAMA.

Millions of taxpayers money will be spent on it, and nobody will end up being accountable due to how NAMA was structured from the beginning. The findings will conclude that there was widespread corruption, and lessons will be learnt ...until the next time.

sheesh

Has anyone mentioned that the EU told the Irish government not to let any of the banks collapse which is why we guaranteed the banks in the first place

Also it was AIB, anglo (head of credit control was a schoolboy friend of Brian Cowen) that had to be nationalised not B of I

Ipso

sheesh wrote: »

Has anyone mentioned that the EU told the Irish government not to let any of the banks collapse which is why we guaranteed the banks in the first place

Also it was AIB, anglo (head of credit control was a schoolboy friend of Brian Cowen) that had to be nationalised not B of I

French and German banks were up to their t1ts in Anglo bonds, the whole thing was a combination of EU pressure, politicians out of their depth (Cowen, Coughlan and Lenihan got elected on their surnames) and inability to see the magnitude of the problem. For the prior six years or so property was seen as the be all and end all for the economy and people thought that Ireland was actually the richest country in the world.

James Brown

kneemos wrote: »

AIB is ours. It's being fattened up for sale.

Correct me if I'm wrong, but if you're a bondholder with AIB, when you lost out gambling, the tax payer bailed you out and for the next 30 years any profits AIB make are not taxed. So this is good and fair for the tax payer how?

Subcomandante Marcos

the beer revolu wrote: »

NAMA has made a considerable profit, as I'm aware.

Your awareness is wrong.

is_that_so

Matt Barrett wrote: »

Correct me if I'm wrong, but if you're a bondholder with AIB, when you lost out gambling, the tax payer bailed you out and for the next 30 years any profits AIB make are not taxed. So this is good and fair for the tax payer how?

When we sell off the chunk of it we own and they repay anything else owed to the State. Tax scenario potentially puts AIB in a better position to address both of those.

is_that_so

Subcomandante Marcos wrote: »

Your awareness is wrong.

And the next line in this hypothesis is what?

is_that_so

sheesh wrote: »

Has anyone mentioned that the EU told the Irish government not to let any of the banks collapse which is why we guaranteed the banks in the first place

Also it was AIB, anglo (head of credit control was a schoolboy friend of Brian Cowen) that had to be nationalised not B of I

They were not impressed with the €450bn guarantee approach! I reckon this is one reason why we got badly stiffed on loan terms initially.

Geuze

lalababa wrote: »

Irish national debt is 221 billion.
How much did ireland pay initially/ as of 2019 for the bailout ? And how much is it likely to recoup?
For example there is a figure 64Billion for the bailout, How much of this 64B will be recouped when NAMA and the Government shareholdings in the banks are eventually sold?
If the bailout cost 64B , where did the other 157B debt come from ? Is it all from Government defecit?

The gross debt is 214.3bn at end-April 2019.

The net debt is less.

Yes, a good bit of the 63-64bn has, and will be, recouped.

We have already been repaid preference shares by some banks, and we have sold off holdings in BoI and AIB.

However, the 30bn cost of Anglo / INBS / IBRC will be a near total loss.

Yes, the balance of the gross public debt is due to running annual budget deficits over the years.

_blaaz

Geuze wrote: »

The gross debt is 214.3bn at end-April 2019.

The net debt is less.

Yes, a good bit of the 63-64bn has, and will be, recouped.

We have already been repaid preference shares by dome banks, and we have sold off holdings in BoI and AIB.

However, the 30bn cost of Anglo / INBS / IBRC will be a near total loss.

Yes, the balance of the gross public debt is due to running annual budget deficits over the years.

Will the 4.4 billion borrowed pre bailout for anglo and what was in pension reserve fund....ever be recouped


The public is very misinformed on how much was borrowed during the bust

Deebles McBeebles

_blaaz wrote: »

The public is very misinformed on how much was borrowed during the bust

Makes it easier to spin. Like telling us NAMA made a profit.

realitykeeper

I`ve just watched a movie called the Bank of Dave on Netflix. It is about a guy in Burnley who set up his own bank against all the odds in the wake of the banking crisis and bailout of the big banks. Had the big banks not been bailed out, many more community banks would have risen to fill the void. Had that happened, in the UK and countries where similar bank bailouts happened, our economies would have already bottomed out and started to grow organically.

Instead, we have a situation where the bubbles were blown back into the economy. Now, central banks must raise interest rates but cannot raise them enough to deal with our inflation problem. We are at risk of a recession if the central banks raise interest rates too much but even if they do raise them too much, inflation will probably stay elevated and may even continue rising as recession persists. There was nothing organic about the governments interferrence in the banking and property sectors. We will soon see the consequences of that interferrence.