AIB tumbles a further 10pc as investors run scared of Irish banks - Can the Irish Banks survive as independent entities?

Catahualpa

Well-known member
Joined
May 12, 2019
Messages
2,235
Website
irelandinhistory.blogspot.com
This looks BAD folks...

The Irish Banks are in a very very nasty place...

AIB shares tumbled a further 10pc on Wednesday, to trade barely above €1, with rivals Bank of Ireland and Permanent TSB also weaker.

Irish bank shares are the worst hit among European peers over the past year. AIB's stock is now trading at around a third of the price seen in the first weeks of this year and is less than a quarter of its 2017 flotation price of €4.40 a share.

Bank of Ireland shares fell more than 4pc yesterday and are also roughly a third of prices at the start of the year.

Ireland's two biggest banks are the worst performers in the Bloomberg Europe Banks and Financial Services Index over the past year,
AIB tumbles a further 10pc as investors run scared of Irish banks
We are on the verge of another huge financial Crash methinks... :confused:
 


Sync

Well-known member
Joined
Aug 27, 2009
Messages
31,407
This looks BAD folks...

The Irish Banks are in a very very nasty place...
In what way? All you've done is show a drop in share price. That's bad for share holders. It doesn't mean the bank itself is in a nasty place.

All banks have the same problem right now: There's a complete lack of clarity A: On the rate of bad debts and deferred payments that will be incurred over the next 6 months and B: Government's appetite to allow banks take action against that.

But the liquidity in the banks is much better than 2008. There's going to be lots of small companies going out of business, but right now there isn't much to suggest that it's going to lead to multiple defaults on mortgages etc. Could all change, but right now there isn't data to drive the fears you have.
 

gijoe

Well-known member
Joined
Jul 26, 2010
Messages
15,538
In what way? All you've done is show a drop in share price. That's bad for share holders. It doesn't mean the bank itself is in a nasty place.

All banks have the same problem right now: There's a complete lack of clarity A: On the rate of bad debts and deferred payments that will be incurred over the next 6 months and B: Government's appetite to allow banks take action against that.

But the liquidity in the banks is much better than 2008. There's going to be lots of small companies going out of business, but right now there isn't much to suggest that it's going to lead to multiple defaults on mortgages etc. Could all change, but right now there isn't data to drive the fears you have.
I think its more of a case of the share price indicating investor confidence, and the lack therefore, in the ability of Ireland's banks to come out of this crisis in one piece. Which I think is fair enough as they were still weak going in and are facing a wave of bad debts and a weak economy that just will not recover for a number of years. At least now there will be a 'bail in' by the bondholders and depositors over 100k prior to any public funding.
 

Catahualpa

Well-known member
Joined
May 12, 2019
Messages
2,235
Website
irelandinhistory.blogspot.com
In what way? All you've done is show a drop in share price. That's bad for share holders. It doesn't mean the bank itself is in a nasty place.

All banks have the same problem right now: There's a complete lack of clarity A: On the rate of bad debts and deferred payments that will be incurred over the next 6 months and B: Government's appetite to allow banks take action against that.

But the liquidity in the banks is much better than 2008. There's going to be lots of small companies going out of business, but right now there isn't much to suggest that it's going to lead to multiple defaults on mortgages etc. Could all change, but right now there isn't data to drive the fears you have.
Come on - when a share price drops it means investors are losing confidence in that Company

- the Irish Banks are f,cuked and you know it

'The Fundamentals are sound' nonsense doesn't work anymore Brian...
 

Mercurial

Well-known member
Joined
Jun 4, 2009
Messages
93,452
I suppose if they're short of cash they could always ramp up the fees they've introduced even further.
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
Call me cynical but I'm unmoved by the thought of Irish banks going bust. I still think they should have been allowed go bust in 2007. Much rather see a deliberate broadening of the credit union/building society sector/mutual associations in place of these banks who should never have been allowed to offer retail services if they were investment banks and vice-versa.
 

Sync

Well-known member
Joined
Aug 27, 2009
Messages
31,407
In 2007 they were actually to blame for a decade of wild lending, terrible management and poor strategic planning. And they were bailed out.

‘It doesn’t make a lot of sense to think they wouldn’t be bailed out again 13 year later when it’s not actually their fault. The govts are broadly of the same mindset worldwide now as they were then.

If we tell the banks they’re on their own, fair enough. Expect mass evictions and bankruptcies as they manage their own assets.

Part of the next stage is working out how to manage debt in a way that protects homes, jobs, business and banks.
 

McTell

Well-known member
Joined
Oct 16, 2012
Messages
8,346
The days of Quill Pen main street "green jersey" banking are over, for a small market like us.

It's all your starlings and revoluts. Then when you get to 5 mil or so, you set up your own online bank.

Howsabout widening that green jersey to include all their "customers"?
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
In 2007 they were actually to blame for a decade of wild lending, terrible management and poor strategic planning. And they were bailed out.

‘It doesn’t make a lot of sense to think they wouldn’t be bailed out again 13 year later when it’s not actually their fault. The govts are broadly of the same mindset worldwide now as they were then.

If we tell the banks they’re on their own, fair enough. Expect mass evictions and bankruptcies as they manage their own assets.

Part of the next stage is working out how to manage debt in a way that protects homes, jobs, business and banks.
I see no reason to think they are behaving any differently now. There wasn't much in the way of reform after the hames of 2007 in the sector so why should there be an expectation of anything different?

Far as my reading goes bank boardrooms have been taking the mickey out of taxpayers for at least 300 years.
 

McTell

Well-known member
Joined
Oct 16, 2012
Messages
8,346
//

Far as my reading goes bank boardrooms have been taking the mickey out of taxpayers for at least 300 years.

True, but in the 1700s - 1800s - 1900s the state didn't ever own 71% of the equity of a bank. And also pretend it didn't have the power to control it.
 

Catahualpa

Well-known member
Joined
May 12, 2019
Messages
2,235
Website
irelandinhistory.blogspot.com
Call me cynical but I'm unmoved by the thought of Irish banks going bust. I still think they should have been allowed go bust in 2007. Much rather see a deliberate broadening of the credit union/building society sector/mutual associations in place of these banks who should never have been allowed to offer retail services if they were investment banks and vice-versa.
Were it so simple! :rolleyes:

If the banks go bust then 100,000 of customers will lose their deposits

- and they in turn could not pay their creditors and then their creditors could not....

It would be pure economic madness!

Do you understand any of this Lumpy?

Because I sometimes wonder....:confused:

Now you will see why these banks wont be allowed to go Bust.
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
You've put your finger on exactly why I say that retail banking and investment banking should be ringfenced away from each other. One of the greatest mistakes of the big bang deregulation of banks in the 1980s was blurring the line between retail and investment banking. There were concerns at the time about insider trading, but the banking lobby groups assured everyone concerned that bankers had a very honourable system among themselves where they regarded inside the offices exchanging actionable information to be cordoned off by a sort of gentleman's agreement called 'Chinese walls'.

I suppose we should have realised from the terminology that Chinese walls tend to be on the thin side.

There is one major iBank which is now showing signs of wanting to sell financial instruments over the counter on the retail side. Along with Trumps mates in private equity in New York who are also lobbying very hard right now for regulation to be eased stateside so that they can sell funds based on their activities, ETF index betting and other forms of barely understood gambling even by themselves direct to the 'Mom & Pop' investor market. What could possibly go wrong...
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
In fact I'll put my prediction in now. If PE houses and iBanks are allowed to start selling instruments and investments sliced up in small parcels over the counter to Mom and Pop it will end in tears.

There is no way the feral money-hungry nature of these outfits will pass up the chance, if given, to sell the public a load of valueless sh1te talked up by their accomplices in market analysis and commentary. Guaranteed. Natural outcome of the dynamic and utterly foreseeable, just as equally avoidable, but the banks and PE houses want it and they own the regulators.
 

Sync

Well-known member
Joined
Aug 27, 2009
Messages
31,407
True, but in the 1700s - 1800s - 1900s the state didn't ever own 71% of the equity of a bank. And also pretend it didn't have the power to control it.
Also worth restating what Barclays said earlier this year: The govt was advised to sell back in 2018 when they were 5.20, getting about 11 billion in. If they were to sell now they get about 2 billion. My VTech My First Laptop tells me that's a large loss.
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
When banks weren't being bailed out by the state any time since the 1700s the state has always very carefully found ways to avoid holding any bank boards responsible.

A tradition that continues to this day.
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
All I'm saying is that the Irish retail banking sector, the cash machines, the over the counter services, they should not be dependent on whether the investment side of a bank has just slipped on the keyboard and bought the financially sh1tty half of Chicago in error.

Retail banks are systemic. I don't think investment banks are. Or certainly not the investment bank operations of Irish banks.
 

raetsel

Well-known member
Joined
Jun 5, 2017
Messages
11,332
Were it so simple! :rolleyes:

If the banks go bust then 100,000 of customers will lose their deposits

- and they in turn could not pay their creditors and then their creditors could not....

It would be pure economic madness!

Do you understand any of this Lumpy?

Because I sometimes wonder....:confused:

Now you will see why these banks wont be allowed to go Bust.
That's only the start of it. It would create further untold economic chaos. We all rely on banking services, including the small number of people who don't even have bank accounts. They are almost as important as electricity or water supplies.
Arguably online banking services could eventually fill much of the void but there is still a considerable cash economy and local bank branches are needed to keep that running.
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
Fianna Fail have the solution. It's called 'Pay-A-Pal'....
 

Sync

Well-known member
Joined
Aug 27, 2009
Messages
31,407
Retail banks are systemic. I don't think investment banks are. Or certainly not the investment bank operations of Irish banks.
Bill Clinton's true legacy is revoking the Glass Steagall act.
 

Lumpy Talbot

Well-known member
Joined
Jun 30, 2015
Messages
33,994
Twitter
No
I think the damage was done much earlier with the deregulation of banks promoted by Thatcher and Reagan. Clinton's revocation of the Glass Steagall act had more to do with amending the law to prevent racial profiling in credit and mortgage applications. There then followed a blistering run by banks and financial institutions to put a value on packaged mortgages sold on at inflated prices and on much of which there would be subsequent defaults rendering the assets junk.

It all does go back to the 1980s.
 


New Threads

Popular Threads

Most Replies

Top Bottom