dan_d wrote: » What?? Well, if that's what Angela Merkel did when she heard we were guaranteeing the banks, I think her fears have proved to be groundless. If anything, it's the other way around - deposits are/were leaving Irish banks.
Slydice wrote: » 12/03/2011: Updated probabilities of default Posted by Dr. Constantin Gurdgiev
hmmm wrote: » At the time there was a rush of deposits into Irish banks. I don't want to sound overdramatic, but our guarantee could have pushed several Eurozone countries over the financial brink. The British in particular were spitting blood down the phone at the Irish government. I think most Irish people don't understand just how much hatred (the Irish) Messrs Lenihan and Cowen stirred up with the guarantee, while Europe was working towards a common solution we decided to go on a solo run that was supposed to solve our problem but put everyone else at risk and forced them in turn to take on liabilities they wanted to avoid. Then Lenihan had the gall to say it was a template for everyone else.
Noreen1 wrote: » FYP. The Irish people, on the other hand, were less than delighted with the Bank guarantee, even when it was 4 Billion, and the "cheapest bailout in history".
hmmm wrote: » At the time there was a rush of deposits into Irish banks. I don't want to sound overdramatic, but our guarantee could have pushed several Eurozone countries over the financial brink. The British in particular were spitting blood down the phone at the Irish government. I think most Irish people don't understand just how much hatred the Irish stirred up with the guarantee, while Europe was working towards a common solution we decided to go on a solo run that was supposed to solve our problem but put everyone else at risk and forced them in turn to take on liabilities they wanted to avoid. Then Lenihan had the gall to say it was a template for everyone else.
Savers on both sides of the Irish Sea started to empty accounts of UK banks and put the proceeds into Irish-owned banks in the wake of a controversial plan by the Republic of Ireland yesterday to guarantee all deposits. Dublin was accused of making matters worse for non-Irish banks, with corporate treasurers and large savers pulling money out and putting it into the safer haven of Irish banks. “If this is legal, then I’m a banana,” one disappointed senior British banker said, arguing that the Irish guarantee amounted to unfair state aid.
Asked if he would go further and copy the Irish plan, Brown told the BBC: "Let's remember that the Irish are dealing with taxpayers' money here. We have got to get what is right and also what is reasonable." He added: "I want people to know that we will do whatever is necessary, however it is necessary, to ensure the stability of the system." The Daily Mail said the Treasury was working on a proposal that could insure 1.9 trillion pounds of deposits in British banks. It said such a plan would carry significant risks as it could shake confidence in sterling and saddle the government with huge debts. The Independent newspaper reported on Wednesday that senior bankers were pressing the government to guarantee bank deposits in full. British banks fear they could lose out competitively to Irish banks that enjoy the full guarantee, the report said. The Irish pledge on Tuesday to guarantee the country's banking system triggered a flood of cash from businesses to Irish banks, a senior Irish stockbroker said.
hmmm wrote: » I haven't the slightest clue where he's getting his figures from, hopefully he will explain.
dan_d wrote: » What?? Well, if that's what Angela Merkel did when she heard we were guaranteeing the banks, I think her fears have proved to be groundless. If anything, it's the other way around - deposits are/were leaving Irish banks. We do not need to threaten to leave the EU. How on earth do you perceive any benefit in that? Have all the hundreds of endless threads around here not got it through to people that sure, we could default, but we'd be the biggest losers at the end of it all? We have not got any money. Our banks are on their knees. We have put ourselves in a position whereby we are getting money from the EU, yes, but it's not a deal that's cast in stone for the next X number of years, that can't be budged. It can be.Maybe not straight away, but we will be able to negotiate it to some extent.
ei.sdraob wrote: » Subject will be discussed on prime time @ rte1 on at 9:30 this evening
Scofflaw wrote: »
ei.sdraob wrote: » So beside bondholders half of the depositors who are not Irish could also have been burned for their stupidity.
ei.sdraob wrote: » laws could be changed, guarantees can be removed as quickly as added not that guarantees are worth the paper they are written on since there is nothing to back up the guarantee
K-9 wrote: » Which is part of the problem. No Government wants to tell deposit holders, sorry, we guaranteed your money, but we can't pay out.
ei.sdraob wrote: » Hey no government wants to default either but we are falling down that slide now. I still remember the day after the guarantee asking in confusion, what is the guarantee backed by?
No they couldn't. All EU depositors must be treated exactly identically under EU law (irrespective of whether they are Irish or not). A large chunk of that "Rest of World" figure probably included the UK and a lesser amount the other non-Eurozone EU states. Hence our room to "burn" the "Rest of World" bondholders is much less than might appear at first glance (if we exclude the option of burning ourselves as well that is).
or even people who didnt bank with dodgy casinos like AIB and Bank of Ireland.
A Question Of Default (VIDEO) Ian Kehoe blogs ahead of tonight's Prime Time, which tackles the thorny and contentious issue of default: Despite the pre-election rhetoric, the Irish Government is not seeking to burn those banking bond holders. However, they have now acknowledged that the burden of the bank liabilities, coupled with our historic debts, would soon reach a point where sustainability would be a major issue.
Iwannahurl wrote: » If we can't afford to repay then at least a partial default must happen. Otherwise we're sunk, no? I've been thinking about this again while watching the devastation in Japan. There's talk of the earthquake, tsunami and nuclear meltdown costing Japan 120-180 billion Euro for recovery and reconstruction. The global insurance industry alone is to be hit for €34 billion. This is seen as an economic disaster for Japan that could plunge them into a prolonged recession. Japan has a population of 120 million and a GDP of around 3.5 trillion Euro. Here in Ireland we have 4 million people and a GDP (misleadingly inflated) of €180 billion. And the estimated final cost just for bailing out a few of Paddy's casino banks is €120 billion!!! When all that money is spent -- most of which we will never see again -- unlike the Japanese we won't have new schools, hospitals, roads, power stations, public services and other essential infrastructure as a result. Sick, sick, sick...
ei.sdraob wrote: » Central bank of Japan also created 60 billion out of thin air after the quake, more to come...
Iwannahurl wrote: » Isn't that what's called quantitative easing? Better to make it appear out of thin air than disappear down a black hole?
hmmm wrote: » hole in the money supply as people cut back on spending and investment.
PeterIanStaker wrote: » Default is inevitable
PeterIanStaker wrote: » Default is inevitable. Discuss
Taxi Drivers wrote: » Here is an alternative take on it that generally goes by the numbers. It concludes (emphasis mine): Regardless, I think an €81 billion bank bailout package is sustainable – though it is a colossal and, particularly in the case of Anglo and INBS, a needless waste of money. What will the final cost of this financial disaster be? We await the answer. If we can get out the far side for something less than the €35 billion available under the EU/IMF deal then we can survive it without default. We must decide if we want to continue along this road and the opportunity to change course grows ever smaller as more and more bonds are paid off (with the money provided the ECB). This decision, and the decisions required to bring down the fiscal deficit, must be made quickly. We are still in a position where default is an option rather than a necessity. I don't think there are too many commentators who think the final cost will come in at around €80 billion. Many suspect it will be €100 billion (or more!) but it the absence of actual figures the piece makes a nice counter balance. I hadn't really considered that a portion of the money wasted on the bank bailout won't actually be borrowed. It suggests the extra debt burden will be something around €53 billion but I can't really see us being able to sell the big banks at a price to reduce this coming to pass.
Regardless, I think an €81 billion bank bailout package is sustainable – though it is a colossal and, particularly in the case of Anglo and INBS, a needless waste of money.
