Troubled by tiger raids? It's yer own fault for wanting free ATMs

I take no little exception to this gentleman attempting to draw some kind of spurious link between his Governments desire to introduce yet another element of taxation and the activities of criminal elements.

There is NO connection in this instance and this Minister should be required to withdraw his ludicrous remarks or failing that produce definitive proof to the contrary.

There are also other elements involved such as the compulsion placed on many individuals to accept Electronic Funds Transfer for payment of their wages.

In spite of being entitled to payment of wages by cash under the Truck Acts I and many others had to sign away this entitlement in order to secure employment.

This action alone forces us to become captive customers of the Banking Sector and under certain circumstances we then have to pay to acccess our own funds.

I have little doubt that if Minister Aherne was to have similar bank charges imposed on him as a result of his wonderful idea he would immediately claim those charges as a "Expense" on his Dáil salary in accordance with the Callelley principles.

The fact that this Minister was given air-time to float this nonsense points strongly to the notion already having been discussewd at Cabinet.

This crackpot notion needs to be iced NOW and very publicly too as failure to successfully challenge this imbicillic notion will only serve to encourage those behind it ! :mad: :mad: :mad:

Tap dancing christ - in the midst of a recession, a minister wants to put a tax on people taking out cash with the purpose of spending it? Seriously?:rolleyes:

I dunno....at this point...I just dont know.

We really, absolutely, positively need a constitutional ammendment that puts term limits on service in the Dail. Desperately we need this.

We also need a better media - that a Minister could announce this without being mocked by journalists reporting on it is an indictment of Irish journalism.

Jesus christ...a tax on spending in a recession. I am without words.

This is an astonishingly stupid statement from Ahern.

Words can't express how annoyed I am at these clowns.

If he tries to bring this tax in how can we stop him?? (honest question, we need to stop this moron)

Jeboa Safari wrote: »

The other banks who will fail if anglo does

Show me the figures to back this up, or do you want me to simply believe it? Like how people believe in FF.

I believe in FF, the party, the almighty,
Makers of scandal and dirt,
And all that is Green, the has-beens...

If we are going to spend billions I want undeniable proof that this bank was systemic,
Not just the word of some prophet called Honohan and some sinners called Brian

PS I'm aware you may have been saying that tongue in cheek, and if you meant it sarcastically then take my comments in the vein they were meant- for those people who believe we should be bailing out that bank

€33bn? That's odd, the latest Anglo figures put deposits at €23bn down from €28bn IIRC. Anyway nobody who has argued against saving all of Anglo has suggested letting depositors burn, if the banks on the other hand were investing in Anglo i.e. Lending to Anglo for them to lend to cock sure developers then the banks deserve to be burnt and should be recapitalized at source for their losses if need be with the government taking a stake for their bailout. Then at least the loss would be quantifiable.

Saying Anglo was systemic is nonsense and even if it were true letting it go to the wall just means the government would have to provide greater support to the other less toxic banks, you know, the recoverable ones, the ones worth saving.

Jeboa Safari wrote: »

This says that they have 33b in deposits from other banks, which I assume if they're not paid back would put huge pressure on them. Now I'm open to correction, I assumed that the risk of Anglo failing and bringing down the rest of the banking system with them is the reason for the amount of money being pumped into them. If you have the links to economists saying that this isn't the case and offering alternatives then I'd be genuinely interested in reading them.

The money is being pumped into Anglo because the creditors are guaranteed by the state, contagion might be a secondary issue but is one that could be addressed in the absense of a guarantee.

ei.sdraob wrote: »

I asked time and time again for detail and still no answer. Instead of a "bank" (in inverted commas its hard to call Anglo a bank, more of a gambling operation) falling and bondholders and shareholders getting burned, the whole country is now being dragged towards default

on the eve of the guarantee..

1. What was the total amount held by depositors in Anglo (not bondholders, shareholders etc, or any of that questionable moving money around crap Anglo did...) ?
2. What was the rough number of depositors?

please please do present these two vital pieces of information that would help paint a picture of this "bank"

The amount of depositers or amounts held on deposit is not what determines the systemic importance of a bank. Look at Lehman Bros, a bank which had no presence on the american high street, involved even more than Anglo in gambling (i.e. a large trading desk) and yet the collapse of this bank almost brought down the entire US banking system. Banks trade on confidence, they have large amounts of on-demand or short term liabilities and assets which can not be liquidated easily. The point made by Honohan is that if Anglo's liquidity shortfall was not addressed and the bank went bust the knock on effect on confidence in the other Irish banks would have meant that they befell the same fate within a matter of days. The country is then left without a banking system, ATM's stop working, people can not access their funds or even process transactions - in short, bedlam.

I'm all for letting investors take the hit when their punt doesn't pay off but unfortunately in the case of banks our entire society depends on their operation so a banking wide collapse cannot be countenanced.

The banking report can be found here, it's a big document but the interesting part is section 8 which covers the year up to September 2008.

ei.sdraob wrote: »

4,500,000 (population) * 20,000 (old guarantee) = 90 billion this is the absolute worst case scenario if ALL the banks fell

90 billion is the figure that S&P claim will be lost due the financial crisis

But it's not even close to the worst case scenario in the case of a country wide banking collapse. That would be the cost to the exchequer to refund depositers (well it wouldn't be nearly that high but let's say it is for arguments sake), how would the loss of funds over 20k affect irish businesses, how would it affect MNC's view of Ireland (a country without a banking system), how would it affect day to day business when every clearing bank in the country is in liquidation, how would it affect society in general when people cannot use ATMs.

By the way the S&P estimate includes no value for NAMA loans, even the most pessimistic commentator has not suggested a 40bn loss on NAMA.

ei.sdraob wrote: »

I do not understand how you can continue to defend the action taken which is well on its way of costing us more than the absolute worst case scenario of the main banks falling
Hell if these banks fell other banks would have stepped in, the EU would have had no choice to step in too

There can be no doubt that something had to be done to protect the banking system, as unpaletable as it sounds we depend on our banks and a letting the cards fall where they may attitude and hoping someone sorts it out for us is irresponsible in the extreme.

The question then is what should have been done. With the benefit of hindsight Anglo and INBS should have been let fail (together with support for irish creditors) and the other banks guaranteed. However as we know the information being supplied to the DoF was BS, from Anglo, the other banks, the regulator, the PWC review of Anglos loan book etc etc. The situation had come to a head and a decision had to be made one way or the other. The wrong decision was made, but one which would have seemed reasonable at the time given the available information.

Should a blanket guarantee have been given? - certainly not. All that was needed was a guarantee similar to the ELG scheme, i.e. new bond issues and depositers. There would not seem to have been any benefit gained from the blanket guarantee.

The fact is those decisions were taken, Anglo creditors are on par with soverign creditors, if we default on Anglo we default on the soverign. The only way to get out of this with as little loss as possible as I see it is either

a) agree a loss sharing scheme with senior bondholders, this will surely need some pressure from Europe or some kind of possibility of profit for the bondholders, otherwise they just call on the guarantee

b) talk up the chances of a default, then buy back the bonds in the secondary market at discounted value

c) hope for a pick up in the economy and property markets

d) default on everything, call in the EU/IMF and be unable to borrow money for the foreseeable future.

Scarab80 wrote: »

Banks trade on confidence, they have large amounts of on-demand or short term liabilities and assets which can not be liquidated easily. The point made by Honohan is that if Anglo's liquidity shortfall was not addressed and the bank went bust the knock on effect on confidence in the other Irish banks would have meant that they befell the same fate within a matter of days. The country is then left without a banking system, ATM's stop working, people can not access their funds or even process transactions - in short, bedlam.

While I agree we obviously need a banking system, nobody was really saying we didn't, we are all just saying we didn't need Anglo. I don't understand your point on confidence in the other banks, it sounds like scaremongering. How would it damage confidence to say to the markets, 'we are cutting this dead weight piece of crap gamblers bank and concentrating our full support and a government guarantee on the rest of our banking system' ? I think the markets would have had more confidence in us.

I'm all for letting investors take the hit when their punt doesn't pay off but unfortunately in the case of banks our entire society depends on their operation so a banking wide collapse cannot be countenanced.

You are again the only one suggesting a banking wide collapse, more scaremongering.

how would it affect MNC's view of Ireland (a country without a banking system), how would it affect day to day business when every clearing bank in the country is in liquidation, how would it affect society in general when people cannot use ATMs.

Again with an entire collapse, even if anglo were systemic to the level of lehmans, letting it fail wouldn't have brought on a system collapse - is there any precedent for that happening? It didn't happen with lehmans. In fact if other irish banks had vast amounts of money tied up in anglo, letting Anglo fail would have at least quantified and solidified the losses and given us a figure for recapitalization. Certainty in this case would lead to more confidence than our current 'black hole' situation of uncertainty. I'd still want to see the interbank figures to show the reliance of our entire system on Anglo, because I've a feeling it was more a case of banks across Europe having a bet with Anglo. And if that was the case then they are not our problem, they bet with Anglo, Anglo failed, we scaffolded the rest of our system and if other countries are worried about their exposure let them recapitalize.

There can be no doubt that something had to be done to protect the banking system, as unpaletable as it sounds we depend on our banks and a letting the cards fall where they may attitude and hoping someone sorts it out for us is irresponsible in the extreme.

Taking on Anglo is answering the hopes of somebody else who wanted another person (in this case country) to take on their risk. Yes something had to be done to protect the system as a whole, rescuing Anglo was not it.

The question then is what should have been done. With the benefit of hindsight Anglo and INBS should have been let fail

.

What's this hindsight? People knew at the time of problems in Anglo, and hiding these should result in major jail time. Lenihan and Cowen admitted in the last few days that they were aware of solvency issues in Anglo far before the guarantee. Going into a deal without proper information and relying on the institution you are saving to be up front with you is totally incompetent and irreprehensible, they ARE economic traitors, no hindsight about it.

Should a blanket guarantee have been given? - certainly not.

That's a lot of arguing you did just to agree in the end