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Was anyone ever held accountable in Ireland for the 2008 crisis?

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24

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    #32
    Fr Tod Umptious
    Registered Users Posts: 15,102 ✭✭✭✭Fr Tod Umptious


    armabelle wrote: »
    What rhetorical question? I asked no question in my previous post, rhetorical or otherwise. I am glad that people weren't deceived by the institutions in Ireland and am glad that no crime was committed.

    I never had an opinion which is why I wanted some more information. Generally speaking, if this happened in my country, I would feel like a crime had been committed against me because a crisis doesn't just happen... it is caused.

    Yes you may fell that a crime was committed and that the crash has a cause, but the cause was not a crime.

    The cause was poor governance by the government, corporate mismanagement by the banks, personal mismanagement by individuals.


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    #33
    Wanderer78
    Registered Users Posts: 29,012 ✭✭✭✭Wanderer78


    Fr Tod Umptious wrote:
    Yes you may fell that a crime was committed and that the crash has a cause, but the cause was not a crime.


    I like the way Bill black puts it, basically we 've legalised financial fraud


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    #34
    Dohnjoe
    Registered Users Posts: 17,815 ✭✭✭✭Dohnjoe


    armabelle wrote: »
    I never had an opinion which is why I wanted some more information. Generally speaking, if this happened in my country, I would feel like a crime had been committed against me because a crisis doesn't just happen... it is caused.

    The cause doesn't necessarily have to be criminal

    The main hypothesis behind the sub-prime mortgage crisis which sparked the financial crisis was not moral hazard (criminal, bad behaviour) but "bubble thinking", i.e. very few, from the average punter on the street up to the largest institutions genuinely thought that house prices in the US were going to drop significantly

    Houses prices had been steadily rising since the 40's, when they collapsed in 06/07, they exposed a system that depended on those prices rising and was not resilient as everyone thought to a sudden drop or change

    It's only natural people just want old testament justice and someone to blame, even when specific crimes aren't necessarily the culprit or cause


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    #35
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    armabelle wrote: »
    Really? That is awful. You Irish must be placid and peaceful people for this to happen and nobody go down. Was there a protest of some kind ever in Ireland about this when it happened? Did people even want justice?

    There was no protest as working people picked up the tab, there are protests over water charges as people on welfare are expected to pay them.


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    #36
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    oscarBravo wrote: »
    It doesn't matter whether or not you "feel" a crime has been committed - unless you can demonstrate that a law has been broken, and that there is sufficient evidence to secure a conviction, then there's not much point complaining that nobody has been punished for the alleged crime.

    yes for sure but do you still get bank robbers nowadays? I mean, isn't white collar crime the crime of our generation? From the article I posted above there is a part that says:

    On the tapes you can hear how high-ranking bankers make fun of the crisis. The €7 billion emergency assistance that they demanded from the government would be paid back when they have the money, the bankers agree jokingly – “in other words: never”.

    Isn't that proof?

    I doubt you will ever find a banker or politican with his hands in the cookie jar as they will always have some kind of an excuse.


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    #37
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    Augeo wrote: »
    There was no protest as working people picked up the tab, there are protests over water charges as people on welfare are expected to pay them.

    Are you making a joke?


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    #38
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    Wanderer78 wrote: »
    I like the way Bill black puts it, basically we 've legalised financial fraud

    ok so you do believe that fraud was commited. Isn't fraud a crime? Can you back this statement up somehow?


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    #39
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    Fr Tod Umptious wrote: »
    Yes you may fell that a crime was committed and that the crash has a cause, but the cause was not a crime.

    The cause was poor governance by the government, corporate mismanagement by the banks, personal mismanagement by individuals.

    but if those individuals so wished, they may well have commited a crime and used the same excuse that you just gave for it couldn't they? I mean, if it is that easy? Blame it on mismanagement. Why not?


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    #40
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    armabelle wrote: »
    so do you think people deserved what they got? I mean those kids with a hangover probably did don't you think?

    Would you buy a house now? There's a panic in the rental sector but house prices are increasing. Similar to 2008 except now we know that property does fall and the central bank is reining in the banks with income multiples. Without that prices would be back to 2006. Yet the rental sector is so badly managed that people still want to buy.

    Back then except for a few heretics all economists, central bankers, real estate agents -- the supposed "experts" we're saying that there was no chance of a bust, that everything was fine, that the housing market needed fewer taxes etc. Ordinary people just wanted a house. If they are increasing at 20% year in price and the experts say this will continue indefinitely then joe soap will buy his shoe box for 400,000.

    You might end up buying one for 300,000 if you stay as it probably beats rent.

    Very little that was done was illegal. We reacted after th bust by voting for left wing, populists independents etc - which makes the country ungovernable. And now another crisis.


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    #41
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    armabelle wrote: »
    but if those individuals so wished, they may well have commited a crime and used the same excuse that you just gave for it couldn't they? I mean, if it is that easy? Blame it on mismanagement. Why not?

    It would be nice if we could sue economists but then there would be no economists.


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    #42
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    El_Duderino 09 wrote: »
    Are you happy to compare the nation to children?

    We share responsibility. I don't know anything about blame or prison sentences. I think it's just silly talk. If we don't have an honest look at why it happened, we'll learn nothing.

    More importantly, we have never had a discussion about what we should do next time there us money floating about. I'm going to be a complete heretic and suggest that next time there's money, we put some aside for a rainy day...

    You don't trust the car salesman just because they said its a good deal. You don't trust an estate agent just because they said it's a good deal. Do you trust the credit salesman just because they said it's a good deal?

    I am happy to compare them to children if the analogy is good enough. I never made the analogy but the poster that did maybe know more about the crisis than I do since I know pretty much nothing? But I am trying to learn and you seem to be saying nobody is to blame for such a catastrophe or perhaps what you are saying is that the people are responsible because they accepted loans, is this indeed correct?


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    #43
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    Eugene Norman wrote: »
    It would be nice if we could sue economists but then there would be no economists.

    economists don't make decisions on the economy IMO, they study them don't they?


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    #44
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    armabelle wrote: »
    Are you making a joke?

    Not at all, USC no protest, water charges lots of protest.

    Who doesn't pay USC?


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    #45
    Mr. teddywinkles
    Registered Users Posts: 2,001 ✭✭✭Mr. teddywinkles


    The funny thing about this topic is if everyone bought property with cash instead of loans. The so called boom would still be going to this day and no one would have known the difference to this day. Which means everything is fine till the **** hits the proverbial fan.
    People just want someone to blame then.


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    #46
    tommyhayes1989
    Registered Users Posts: 163 ✭✭tommyhayes1989


    I've done some work in the area and I think it boils down to a few major issues.

    You can argue that the banks were very aggressive and over-lent to the property sector, but at the end of the day they were making serious money from it so in their eyes why would they stop. I'm not excusing their behavior but certainly you can see how they would be doing it.
    Secondly, the financial regulator, who's main job, is to review and regulate the financial sector was wholeheartedly under performing, either by being ill-equipped or their own ineptitude. We would assume that if the FR had some teeth at any point they would have/should have intervened to do something at an earlier stage.
    Finally, when everything blew up, Irish banks were over-exposed to property, with money they had borrowed short term from the ECB and Germany et al. They no had a short term funding problem with a load of loans that were beginning to defualt.


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    #47
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    Other people that should be held "accountable":
    1. Public sector workers who looked for pay rises on the back of boom-era property taxes
    2. All workers who were happy to see income tax cuts on the back of boom-era property taxes
    3. Anyone on social welfare who accepted increases on the back of boom-era property taxes
    4. Any pensioners who accepted pension increases on the back of boom-era property taxes
    5. Anyone who used the phrase "rent is dead money"
    6. Anyone who used the phrase "property ladder"


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    #48
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    Augeo wrote: »
    Not at all, USC no protest, water charges lots of protest.

    Who doesn't pay USC?

    what is USC?


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    #49
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    armabelle wrote: »
    economists don't make decisions on the economy IMO, they study them don't they?

    They are the experts though. Politicians aren't.


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    #50
    El_Duderino 09
    Registered Users Posts: 20,095 ✭✭✭✭El_Duderino 09


    armabelle wrote:
    I am happy to compare them to children if the analogy is good enough. I never made the analogy but the poster that did maybe know more about the crisis than I do since I know pretty much nothing? But I am trying to learn and you seem to be saying nobody is to blame for such a catastrophe or perhaps what you are saying is that the people are responsible because they accepted loans, is this indeed correct?

    I'm saying the second one. The people share the blame because they accepted loans that relied on their income staying extraordinary high for the term of the loan. They bet on the boom lasting. That's really silly but I don't think people accept their mistake and some people can't wait to make the same mistake again


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    #51
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    Mr. teddywinkles wrote: »
    The funny thing about this topic is if everyone bought property with cash instead of loans. The so called boom would still be going to this day and no one would have known the difference to this day. Which means everything is fine till the **** hits the proverbial fan.
    People just want someone to blame then.

    There was nowhere near enough cash to buy all those houses. If restricted to cash buyers the market would have been stalled long before peak.


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    #52
    micosoft
    Registered Users Posts: 2,359 ✭✭✭micosoft


    armabelle wrote: »
    it is difficult but surely for something like this the builders and institution/s should be blamed and fined instead of the tax payer?

    Fine what? They all went bankrupt. You can't fine someone who has no money.

    As an aside the Shareholders of all the banks bar Bank of Ireland (who were more prudent then others despite Shane Ross* and others berating them to be more like Anglo Irish Bank) lost EVERYTHING when the banks were nationalised. Ten's of thousands of Shareholders ranging from retired professionals with 100k to Pension funds lost their shirt. They were the beneficial owners and they were punished harshly.

    As for the property developers (which I think you mean) - the vast majority were made bankrupt. Many committed suicide. Some who had assets outside of Ireland which were not as badly affected might make a comeback.

    We have to end this toxic narrative that a small group of people created the crisis and that it was a banking crisis. The banking element is a small part of the crisis - borrowing to pay for day to day Government spending is a far bigger story. The state relied on extraordinary bonanza from the overheated building sector to fund this. Essentially the elected Government funded day to day expenditure by getting it's citizens to borrow it in the form of mortgages and pay stamp duty. When the music stopped this collapsed.

    It took the electorate three Fianna Fail administrations to wreck the economy by demanding lots services without any idea how we pay for it. It looks like once again the Electorate are going to vote for another Ponzi scheme.

    The buck stops with an electorate many of whom don't care where the money comes from. Going back to your question - was anyone punished for the crash. They were. The Irish Electorate was punished heavily for what it did. The real question is have the electorate learnt anything. Sadly the answer seems to be - very little. And false narratives like the above don't help.

    *And this is typical of the Irish Electorate. I know what I consider to be educated people voting for Shane Ross because "he shines a light on the incompetence in Government" when in actual fact he was one of the worst. Lauding Sean Fitzpatrick back in the day and suggesting he run the Central Bank. Denigrating the Court of Bank of Ireland because they were not making "gangbuster" profits like Fingletons Irish Nationwide. This man represents the worst of that cheerleading yet seems utterly unaccountable for what he put in print before the crisis. The electorate needs to be more discerning on who they vote for and the forth estate better at critiquing this.


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    #53
    Godge
    Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    armabelle wrote: »
    how so?


    Was it incompetence or corruption?

    Certainly, people in the main banks like Fitzpatrick and Drumm were greedy. Sean Quinn was definitely greedy and foolish trying to hide the fact he was buying a bank through CFDs backed by his insurance business. The property developers were all greedy and believed the gravy train would keep on coming. Cowen was incompetent, as were senior officials at the Central Bank. Lenihan was an ill man who wasn't able for the job as Finance Minister.

    However, greed and incompetence don't equal corruption. They are not crimes.


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    #54
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    micosoft wrote: »
    Fine what? They all went bankrupt. You can't fine someone who has no money.

    but maybe their money is in Panama?


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    #55
    armabelle
    Registered Users Posts: 1,017 ✭✭✭armabelle


    Godge wrote: »
    Was it incompetence or corruption?

    Certainly, people in the main banks like Fitzpatrick and Drumm were greedy. Sean Quinn was definitely greedy and foolish trying to hide the fact he was buying a bank through CFDs backed by his insurance business. The property developers were all greedy and believed the gravy train would keep on coming. Cowen was incompetent, as were senior officials at the Central Bank. Lenihan was an ill man who wasn't able for the job as Finance Minister.

    However, greed and incompetence don't equal corruption. They are not crimes.

    but if I wanted to be corrupt, couldn't I just blame it on incompetance and get off scott free?


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    #56
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    micosoft wrote: »
    Fine what? They all went bankrupt. You can't fine someone who has no money.

    As an aside the Shareholders of all the banks bar Bank of Ireland (who were more prudent then others despite Shane Ross* and others berating them to be more like Anglo Irish Bank) lost EVERYTHING when the banks were nationalised. Ten's of thousands of Shareholders ranging from retired professionals with 100k to Pension funds lost their shirt. They were the beneficial owners and they were punished harshly.

    As for the property developers (which I think you mean) - the vast majority were made bankrupt. Many committed suicide. Some who had assets outside of Ireland which were not as badly affected might make a comeback.

    We have to end this toxic narrative that a small group of people created the crisis and that it was a banking crisis. The banking element is a small part of the crisis - borrowing to pay for day to day Government spending is a far bigger story. The state relied on extraordinary bonanza from the overheated building sector to fund this. Essentially the elected Government funded day to day expenditure by getting it's citizens to borrow it in the form of mortgages and pay stamp duty. When the music stopped this collapsed.

    It took the electorate three Fianna Fail administrations to wreck the economy by demanding lots services without any idea how we pay for it. It looks like once again the Electorate are going to vote for another Ponzi scheme.

    The buck stops with an electorate many of whom don't care where the money comes from. Going back to your question - was anyone punished for the crash. They were. The Irish Electorate was punished heavily for what it did. The real question is have the electorate learnt anything. Sadly the answer seems to be - very little. And false narratives like the above don't help.

    *And this is typical of the Irish Electorate. I know what I consider to be educated people voting for Shane Ross because "he shines a light on the incompetence in Government" when in actual fact he was one of the worst. Lauding Sean Fitzpatrick back in the day and suggesting he run the Central Bank. Denigrating the Court of Bank of Ireland because they were not making "gangbuster" profits like Fingletons Irish Nationwide. This man represents the worst of that cheerleading yet seems utterly unaccountable for what he put in print before the crisis. The electorate needs to be more discerning on who they vote for and the forth estate better at critiquing this.

    I don't buy this blaming of the little people. The point of representative democracy is to elect politicians (not experts) who should listen to experts. Ireland didn't have high borrowing costs during the boom, private debt was increasing enormously but no economist said much about that. The banks loaned crazy money. The regulators didn't regulate. The ECB kept interest rates too low.


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    #57
    micosoft
    Registered Users Posts: 2,359 ✭✭✭micosoft


    tommyhayes1989 wrote: »
    Secondly, the financial regulator, who's main job, is to review and regulate the financial sector was wholeheartedly under performing, either by being ill-equipped or their own ineptitude. We would assume that if the FR had some teeth at any point they would have/should have intervened to do something at an earlier stage.
    [\QUOTE]

    I have to think that Neary was not an "accident" but a deliberate political decision. Less question of the Ponzi economics of the administration. I remember getting a letter from the Central Bank in the mid nineties when taking out a mortgage querying my income and the approval I had gotten. They were that involved. This high touch regulation was eliminated by the PD's.


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    #58
    Seth Brundle
    Moderators, Politics Moderators Posts: 39,185 Mod ✭✭✭✭Seth Brundle


    micosoft wrote: »
    I have to think that Neary was not an "accident" but a deliberate political decision. Less question of the Ponzi economics of the administration. I remember getting a letter from the Central Bank in the mid nineties when taking out a mortgage querying my income and the approval I had gotten. They were that involved. This high touch regulation was eliminated by the PD's.
    Neary was chosen but I don't believe that it was so that he would allow dodgy deals to go on but that he would be a light touch regulator.
    As the public wanted continued easy access to credit and the politicians wanted a happy electorate, this meant that a light touch regulator was needed.

    I wouldn't just blame the PDs for it. It was all of the parties to be fair. Everyone wanted to feel rich and the parties weren't going to get in their way.


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    #59
    Godge
    Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    armabelle wrote: »
    but if I wanted to be corrupt, couldn't I just blame it on incompetance and get off scott free?

    You could try.

    However, if you want to accuse somebody of corruption, you would need to have some evidence. There is next to none. A lot of evidence of sharp business practice, of lax regulation, of political incompetence but very little evidence that there was corruption. There is also the bigger picture of three successive FF governments destroying the tax system and promoting the property market at the expense of sustainable growth, in other words, we brought a lot of it upon ourselves.

    It would be great to find someone corrupt to blame, to absolve the electorate from its part, but we did elect FF three times and we don't seem to have learned that lesson.


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    #60
    Godge
    Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    Eugene Norman wrote: »
    I don't buy this blaming of the little people. The point of representative democracy is to elect politicians (not experts) who should listen to experts. Ireland didn't have high borrowing costs during the boom, private debt was increasing enormously but no economist said much about that. The banks loaned crazy money. The regulators didn't regulate. The ECB kept interest rates too low.

    Richard Bruton and Joan Burton in opposition had a lot to say about the reckless dependence of government revenues on the property market. What was it Bertie said about such sentiments?


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    #61
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    Godge wrote: »
    Richard Bruton and Joan Burton in opposition had a lot to say about the reckless dependence of government revenues on the property market. What was it Bertie said about such sentiments?

    Well I said "little people". It would be great if we elected smart politicians.


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