'bank deposits dwindling' FT



powderfinger

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Hang on, CS. We have the makings of a good bank, and we, the taxpayers, own a majority of the components .

Money is walking out of BoI and AIB for the reasons Constitutionus gave, but also because people know in their gut that they both can't survive. One might, but how can you know which one? Either way, the smart response is trust neither.

So why not let one go - my choice would be AIB. Sell it off to a foreign buyer, if one can be found, if necessary insuring its loan book to an extent. It'll cost, but not more than it's currently costing, and it should be spread over a longer period. If, as is fairly likely, no buyer is found, shut it down. Transfer the assets and liabilities into Bank of Ireland, and liberate a few billion of money it's currently intended to commit by way of capital injection into AIB. There may well be bits of the loan book that'll have to go a Nama-style route, but so what.

At a stroke, you've slashed the administration costs of the Irish banking system. You reduce the amount of new capital required (that has to be soaked from taxpayers or the NPRF). Even if it didn't reduce the amount of capital needed, at least that money would now be committed to a plausibly solvent entity, in which depositors, retail, commercial and wholesale, could place their trust.

P1ssing money away on a selection of bad banks that are getting worse by the day makes no sense whatsoever. We need a good bank, and one could be carved out of those already under effective state control.

Most likely a lot of the 15,000 or so employees of AIB would lose their jobs. Well, that would merely be an acceleration of the inevitable. And as for competition? If there's anything still around to compete for in a few years time, that's an improvement on the current prognosis, and we can have the luxury of addressing that problem then.

I can't understand why, over the last few years, the statement-of -the-bleedin'-obvious that "Ireland needs a healthy banking system" has automatically been assumed to mean that the existing entities should be supported, and at any cost up to and including national bankruptcy.
That's well put NUJ.
Why not?
The IMF/ECB are going to facilitate a sovereign loan destined for the broken balance sheets of AIB and BoI.
There has to be a better way to minimise exposure and maximise any potential return for the Irish citizen,if this loan is requested.
Throwing good money after bad at the problem won't fix it.
 

nuj

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May 26, 2004
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I'm afraid we're stuck with FRB - and heartfelt thanks for parking the issue!

A reversal of deposit outflows would be a huge start - and would immedately reverse the increasing dependency on the ECB. Funding would be a hell of a lot easier - capital funding, I mean, as well as interbank funding - if investors and counterparties knew there was every chance of getting their money back. A serious attempt to establish a well-capitalised bank, the lack of which has brought the whole debacle to a head, is essential, though.

Yeah, it might be too late, and there are still huge systemic bank problems globally that need to be dealt with down the line, or maybe sooner, but the fact remains that, as matters stand, BoI and AIB have no chance of independent survival. One of them might, but both can't.

There will be a banking system here in 5 and 10 years time. It'd be an idea for the state now to get proactive in terms of its design, instead of reacting to whatever it gets landed with by way of systemic risk. It'll never have a better opportunity.

I'm not suggesting that doing this will provide any easy way out, because there are no easy ways. But I'd love to see an Irish government get ahead of the game for once.
 

lff12

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Jun 24, 2004
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372
Could members plz show a certain responsibility when it comes to questions of "runs" on banks. Remember what happened in 1929...I have no time for this wretched govt but none of us should want our bank accounts to go up in smoke.
Um, most people here would panic at the thought of being unable to access their funds tomorrow. The problem really is down to the governments persistently getting it wrong - its a boy who cried wolf situation - Cowen/Lenihan haven't a shred of credibility left and even though they may be technically correct, a lot of people have already been burned.
 

ocoonassa

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The problem really is down to the governments persistently getting it wrong
Change the word government for electorate and you're about right.

Too many stupids with the mandate. They haven't gone away.
 

anewbeginning

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Could members plz show a certain responsibility when it comes to questions of "runs" on banks. Remember what happened in 1929...I have no time for this wretched govt but none of us should want our bank accounts to go up in smoke.
+1 million.

I'm sick of listening to trolls and crybabies talking about withdrawing their money from the bank.

Everyone's money is perfectly safe so long as people avoid panicking or creating a run on the bank.

Banks only ever need 10% of deposits on hand, even in the middle of a boom. Even the best run banks of the world would only be able to provide people with 10% of their deposits if everyone came calling.

In truth most people's money is virtual.

The surest way to jeprodise your savings is to panic.

So don't panic!
 

Tea Party Patriot

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I think now it is too late to set up a temporarily State run Good Bank. No one believes us anymore. Too much spoofing and at the end of the day, the deeply flawed Global Financial System is based on confidence and illusion.
If the fractional reserve system isn't abandoned or radically modified this will occur all over again in another 30 years or less even with new good banks. Also the practice of state guarentees has to be abandoned. People will just have to check on the soundness of a bank themselves before putting money on deposit and they shouldn't have it all in one bank. It is an example of the nanny state gone mad.
 

Tea Party Patriot

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+1 million.

I'm sick of listening to trolls and crybabies talking about withdrawing their money from the bank.

Everyone's money is perfectly safe so long as people avoid panicking or creating a run on the bank.

Banks only ever need 10% of deposits on hand, even in the middle of a boom. Even the best run banks of the world would only be able to provide people with 10% of their deposits if everyone came calling.

In truth most people's money is virtual.

The surest way to jeprodise your savings is to panic.

So don't panic!

I agree with on that panic is a sure way to collapse the banks not protect them.

However a bailout is going to happen if lack of deposits continue to reduce reserves.
 

anewbeginning

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There is no alternative to saving our banks regardless of the cost.

An economy cannot function without banks, Economics 101.

Remove the banks and we don't have an economy and instead of 450,000 on the dole, we'd have 2 million on the dole.

So can we have an end to the idiotic talk about letting our banks fail.

Things are bad, but we can still turn the economy around if we stablise our budget deficit and our banking system. But if we don't stabilise either and just panic, then we might as well forget about turning the economy around.

Now is the time for all hands to the pump and ending hysteria and blaming each other.

We need the same fighting spirit as Pearse and all that.
 

dublinman

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May 20, 2010
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they dont know how to fix the banking problem they could plough more money into the banks but it might not fix the problem i read in one financial paper abroad that possibly a few banks could go to the wall next year the only real way to fix it once and for all which i was against but is to create a new bank and dont put money into the others just leave them go to the wall and transfer customer accounts into the new bank
 

ONQ

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they dont know how to fix the banking problem they could plough more money into the banks but it might not fix the problem i read in one financial paper abroad that possibly a few banks could go to the wall next year the only real way to fix it once and for all which i was against but is to create a new bank and dont put money into the others just leave them go to the wall and transfer customer accounts into the new bank
Its been said over on askaboutmoney for a long time now.
An example should have been made of Anglo .
No one listened.

ONQ.
 

vanla sighs

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The surest way to jeprodise your savings is to panic.

So don't panic!
No offence but had to laugh, when I hear folks saying "don't panic!"......well,.......People will each do what they feel is best of course, personally we're probably going to take the few grand we have in savings out just to be on the cautious side. It's not much but could come in handy at some stage. We may not but we are thinking more seriously about it now. As someone else alluded to, it's a question of confidence and trust and this government and by definition the banks they as good as own don't exactly scream stability, confidence or trust.

Will a run come? Maybe but equally maybe not. If it did it would it not force the governments hand and root and branch reform would have to be initiated within the rotten to the core banking sector (or remnants thereof)?

By the way, we were going to tranfer our moula out a few days ago to our paypal account but when we phoned the bank they said not to because "money can simply vanish" when being transferred between the bank and paypal and they have seen it happen time after time - maybe that's so, never heard about it before if it is but equally maybe they are simply trying to get us to keep our dosh in their coffers. Going to physically withdraw the cash later today me thinks.
 
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anewbeginning

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Had to laugh, when I hear folks saying "don't panic!"......well,.......People will each do what they feel is best of course, personally we're probably going to take the few grand we have in savings out just to be on the cautious side. It's not much but could come in handy at some stage. We may not but we are thinking more seriously about it now. As someone else alluded to, it's a question of confidence and trust and this government and by definition the banks they as good as own don't exactly scream stability, confidence or trust.

Will a run come? Maybe but equally maybe not. If it did it would it not force the governments hand and root and branch reform would have to be initiated within the rotten to the core banking sector (or remnants thereof)?

By the way, we were going to tranfer our moula out a few days ago to our paypal account but when we phoned the bank they said not to because "money can simply vanish" when being transferred between the bank and paypal and they have seen it happen time after time - maybe that's so, never heard about it before if it is but equally maybe they are simply trying to get us to keep our dosh in their coffers. Going to physically withdraw the cash later today me thinks.
Fine, withdraw your money.

However, if you destroy Irish banks to save your own deposits, it will be a pyric victory, in that if you work for a small business as an example, they will probably not be able to get any more credit if their bank goes under, thus leading to you losing your job.

A properly functioning, fully funded banking system, is crucial to about 90% of the jobs in this country, lest anyone forget. Undermining your bank is probably the worst thing you can do for long term personal financial security.

Beware the law of unintended consequences.
 

vanla sighs

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Fine, withdraw your money.

However, if you destroy Irish banks to save your own deposits, it will be a pyric victory, in that if you work for a small business as an example, they will probably not be able to get any more credit if their bank goes under, thus leading to you losing your job.

A properly functioning, fully funded banking system, is crucial to about 90% of the jobs in this country, lest anyone forget. Undermining your bank is probably the worst thing you can do for long term personal financial security.

Beware the law of unintended consequences.
Yes, I see what you are saying and yes, in one way it makes sense however we personally also have to look at the reality of the situation. These are the only savings we have. Not too good should we lose them. I'm not saying there is going to be a run, there probably won't be in fact. By simply taking out the few grand we have isn't going to cause a run! We haven't decided 100% whether to take our money out or not - in two minds but probably will.

Actually, we may simply open a rabobank account and move money into that account.
 
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Cato

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Aug 21, 2005
Messages
20,400
+1 million.

I'm sick of listening to trolls and crybabies talking about withdrawing their money from the bank.

Everyone's money is perfectly safe so long as people avoid panicking or creating a run on the bank.

Banks only ever need 10% of deposits on hand, even in the middle of a boom. Even the best run banks of the world would only be able to provide people with 10% of their deposits if everyone came calling.

In truth most people's money is virtual.

The surest way to jeprodise your savings is to panic.

So don't panic!
I hate to break it to you but people are panicking. I was at the bank last Friday and the lady at the counter told me that there were quite a lot of people in withdrawing large amounts of money. I also know a few people that have taken their money out of the banks; some have moved them to the Post Office, some to the mattress.
 

imokyrok

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Mar 4, 2008
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Is it just the AIB and BoI depositors that need to worry? What about the EBS or the Ulster Bank? And would the Post Office be any safer under the circumstances? I wouldn't have thought so.
 

Binnman

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Sep 18, 2010
Messages
184
There is no alternative to saving our banks regardless of the cost.

An economy cannot function without banks, Economics 101.

Remove the banks and we don't have an economy and instead of 450,000 on the dole, we'd have 2 million on the dole.

So can we have an end to the idiotic talk about letting our banks fail.

Things are bad, but we can still turn the economy around if we stablise our budget deficit and our banking system. But if we don't stabilise either and just panic, then we might as well forget about turning the economy around.

Now is the time for all hands to the pump and ending hysteria and blaming each other.

We need the same fighting spirit as Pearse and all that.
Indeed. I believe that the State intends to officially recognise that 100th anniversary of an armed revolt. So, logic tells me, (read this next slowly) it's OK to take over public buildings when you feel oppressed; shoot people you don't like, etc. And then you get to be recognised as a (dead) national hero!

That's the message, yes?

So, we need to get out on the streets and take over public buildings; just as the guys did in 1916*. They fought against perceived domination; now its our turn to fight against actual domination by a corrupt government.

A government that won't hold the o/s by-elections; one that should go to the country based on their poll results. One whose banks guarantee policy was the worst political decision here ever! One who lies to the people. One who pays themselves waaay too much. And so on, ad infinitum.

You have a choice, FF/Greens/Indos x 2.
General election or a street revolt?
Your call.

*PS I am not advocating use of guns/murder/exectuions/torture etc.
A long term in the 'Joy will do quite nicely for those convicted of economic treason.
 

cozzy121

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May 26, 2009
Messages
5,155
Fine, withdraw your money.

However, if you destroy Irish banks to save your own deposits, it will be a pyric victory, in that if you work for a small business as an example, they will probably not be able to get any more credit if their bank goes under, thus leading to you losing your job.

A properly functioning, fully funded banking system, is crucial to about 90% of the jobs in this country, lest anyone forget. Undermining your bank is probably the worst thing you can do for long term personal financial security.

Beware the law of unintended consequences.
If keeping ones money in a bank isn't good enough for our "great" leader bertie. Then it isn't good enough for the rest of us.
You ff guys have Have been bleeting on about the importance of the Irish banking system ever since you made that sweetheart deal with the banks in September 2008.
Well hear you have it. The Irish nation is being sold out from under it’s citizens noses to keep up Fianna failures policy of keeping the bankers sweet.
You are traitors and will not be listened to.
 

FutureTaoiseach

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Mar 20, 2005
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greatdearleader.blogspot.com
Could the mods examine the IP addresses of those advocating withdrawal from the banks in case there is a hidden agenda e.g. hedge-funds by some of them?
 

Cato

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Aug 21, 2005
Messages
20,400
Could the mods examine the IP addresses of those advocating withdrawal from the banks in case there is a hidden agenda e.g. hedge-funds by some of them?
Is that a serious post? Paranoia much?
 


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