• Due to a glitch in the old vBulletin software, some users were "banned" when they tried to change their passwords at the end of February. This does not apply after the site was converted to Xenforo. If you were affected by this, please contact us.

Can anyone explain Anglo

topcat4

Well-known member
Joined
Apr 14, 2009
Messages
949
This might seem a stupid question, but can anyone explain why we are putting 24 plus billion into this wreck of a bank.

(1) It was a private bank.
(2) It had no systemic importance
(3) It was not equivalant to an "Irish" Lehman's investment bank

I don't like, but understand NAMA, in theory at least it can work, but for what earthly reason are we propping up this Bank.

Please, I know with a thread like this it can just become another platform to knock FF (and while this is justified) it is not the purpose of the thread.
Can anyone make ANY kind of case to justify this huge investment.
 


DeputyEdo

Well-known member
Joined
Aug 9, 2010
Messages
3,449
Well regardless of why they decided to pump money into it at the start, they won't stop now, as that would be the same as admitting defeat and admitting they were wrong.
 

MsAnneThrope

Well-known member
Joined
Apr 8, 2009
Messages
1,807
I keep asking myself if Irish investment and pension funds invested and/or deposited heavily in Anglo. Also, it was widely reported that Michael Somers of the NTMA stopped putting money into Anglo in late 2008. Are we to deduce from this that the NTMA did put a lot of money on deposit there prior to this, or bought bonds?

Anglo/Fitzpatrick was the golden boy in Irish banking, and very few perceived Anglo could do any wrong. So how many other powerful Irish investment and pension fund managers joined the stampede into Anglo in the hope of 'easy money'?
 

Tomas Mor

Well-known member
Joined
Feb 22, 2010
Messages
10,351
I would also like like to see a simple ABC of Anglo, for the case for and against. A lot of people are hazy on NAMA also- haircuts and all the rest. Are there any fairly simple guides to both ?
 

Libero

Well-known member
Joined
May 22, 2004
Messages
2,994
Short version:
Anglo was of systemic importance as of September 2008. A decision was taken to guarantee it and other institutions in order to safeguard the entire banking system - a collapse of which would have been utterly catastrophic.
It's open to debate whether or not the guarantee given was the best solution but it was given and has to be honoured today in the case of Anglo, or else other banks under the guarantee will suffer a run.

Slightly longer version: If Anglo is allowed to collapse, a lot of very well-connected people get their loans called in... And a liquidator gets appointed to wind up the bank, and a whole lot of secrets come tumbling out... There's also the small matter of a lot of p1ssed-off bondholders, whoever they are...
 

Hewson

Well-known member
Joined
Apr 29, 2009
Messages
8,243
I'm not sure that even Anglo can explain Anglo. To me it's a rope tied to a rock that we've tied around our necks and thrown into the deep water. Logic would dictate that a private bank that goes bust should have its depositors protected by the State but that bondholders should take a hit. Bondholders are gamblers who take a calculated risk when lending, either to banks or to governments. They lost on Anglo and I'm damned if I know why you and I will be working for the next couple of decades to ease their pain.

It should NEVER have been given a blanket guarantee by the state. I can only imagine that the idea of a large Irish bank sinking into oblivion scared the living daylights out of the Department of Finance to such an extent that they panicked. The fear that Anglo's demise would bring down AIB and BOI was real. With hindsight, I suspect that, knowing what they now know, Finance might have done things a little differently today. But it's too late now, we're stuck with this bloodsucker that will leech the lifeblood out of our economy for years to come.

What sickens me is that the scum in suits responsible for the financial rape of a nation are still on the outside of prison bars.
 

Fir Bolg

Well-known member
Joined
Dec 8, 2006
Messages
818
Short version:
Anglo was of systemic importance as of September 2008. A decision was taken to guarantee it and other institutions in order to safeguard the entire banking system - a collapse of which would have been utterly catastrophic.
It's open to debate whether or not the guarantee given was the best solution but it was given and has to be honoured today in the case of Anglo, or else other banks under the guarantee will suffer a run.

Slightly longer version: If Anglo is allowed to collapse, a lot of very well-connected people get their loans called in... And a liquidator gets appointed to wind up the bank, and a whole lot of secrets come tumbling out... There's also the small matter of a lot of p1ssed-off bondholders, whoever they are...

Why not just guarantee BoI and AIB and let the rest go to the wall? Why did Anglo have to be included?
 

jpc

Well-known member
Joined
Jun 14, 2007
Messages
4,252
The German goverment had to rescue Hypo Bank due to dreadful dealing in the IFSC.
We are know the bond holders were "investing" money in Anglo. Again they are meant to be professional investors take risks etc.
But the German and other European goverments would be cleaning up the mess if the bondholders were told "Take a hike"
Maybe they said. No boys its your mess we ain't cleaning it up you were supposed to be regulating Anglo. Look at the mess we had to pay for in the Hypobank IFSC debacle that you also were regulating.
We won't give you the money to keep going if you let the bondholders crash and burn.
So we are where we are.
 
Last edited:

Libero

Well-known member
Joined
May 22, 2004
Messages
2,994
Why not just guarantee BoI and AIB and let the rest go to the wall? Why did Anglo have to be included?
Patrick Honohan's Report endorses the idea that back in September 2008, Anglo was systemic in the way its collapse would likely have affected other, bigger banks.

One thing's for sure: if you're not familiar with Honohan's opinion on Anglo, tonic and the other FF boot boys will lay into you for daring to be ignorant of, and in disagreement with, such a prominent expert.

Even if one agrees with the view that Anglo was systemic back in September 2008, that leaves several questions unanswered, such as "Was the guarantee given an appropriate way to protect the banking system?" and "Given what we know of Anglo's deceptive practices, why hasn't the guarantee been withdrawn in the meantime, when a managed wind-down of Anglo would have had less dire consequences for other banks than a September '08 collapse?"

Going back to my original post, there is a mix of good and bad motives to explain every action the government has taken in relation to Anglo. Critics of the government look instinctively to the bad motives; defenders protest any mention of them. That's politics.
 

Newsy

Well-known member
Joined
Aug 23, 2009
Messages
910
I keep asking myself if Irish investment and pension funds invested and/or deposited heavily in Anglo. Also, it was widely reported that Michael Somers of the NTMA stopped putting money into Anglo in late 2008. Are we to deduce from this that the NTMA did put a lot of money on deposit there prior to this, or bought bonds?

Anglo/Fitzpatrick was the golden boy in Irish banking, and very few perceived Anglo could do any wrong. So how many other powerful Irish investment and pension fund managers joined the stampede into Anglo in the hope of 'easy money'?
There is SOME reason why the gov. keep putting money into it. 24 billion is a hell of a lot of money.

I am wondering are you correct in your thinking!!!
 

Grumpy Jack

Well-known member
Joined
Oct 26, 2008
Messages
6,073
One of the things about the bank guarantee, Anglo and NAMA that really annoys me is how the civil servants responsible, particularly those in the Dept of Finance and Central Bank at that time, constantly escape blame for the whole debacle and not one has been held responsible or accountable.

They are, after all, the people who gathered the information, drew up the options and told Lenihan and Cowen this was the only way to deal with the crisis in the banks.

On P.ie and elsewhere, Cowen and Lenihan get the blame for having dreamt up the whole thing to protect and bail-out FF-linked bankers and developers.

But is that not far too simplistic - just an easy target for the rightful anger of the people about the mess that has been made?

The idea that Cowen, Lenihan and others senior FFers dreamt up the bailout of Anglo and NAMA over late-night pints is utterly ludicrous - but people actually believe that now.

Yes, they took the final decision to go for broke - and should be held accountable at the next election.

But those who are ultimately responsible - the civil servants - will probably never be held culpable, never mind accountable, for the mess we are now in.

They were asleep at the wheel for the last decade, missed - or even worse ignored - the recklessness of the banks - and then, when the crisis struck, came up with a solution that went against all basic rules of economics and capitalism.

Why did they do that? And why are they still in position to shape our economic and banking policies considering how they have only made matters worse with the crazy 'solution' they presented to ministers?

Cowen, Lenihan and the rest of the Cabinent while lose their jobs after the next election. Should the civil servants who advised them so badly not lose their jobs also?

Any thoughts...?
 
Last edited:

Nipper

Well-known member
Joined
May 19, 2009
Messages
2,526
We need to see a full list of Depositers and Creditors in Anglo on 27\28 Sep 2009 to understand.

If the fear was for other banks or major corporates like Quinn being taken down by a collapse, why won't they give us any details?

In Quinn case damage is done, arnotts too, who else was exposed by the failure of anglo?


There is no way this is commercially sensitive 2 years on
 

Telemachus

Well-known member
Joined
Apr 8, 2004
Messages
6,480
Website
en.wikipedia.org
Patrick Honohan's Report endorses the idea that back in September 2008, Anglo was systemic in the way its collapse would likely have affected other, bigger banks.

One thing's for sure: if you're not familiar with Honohan's opinion on Anglo, tonic and the other FF boot boys will lay into you for daring to be ignorant of, and in disagreement with, such a prominent expert.

Even if one agrees with the view that Anglo was systemic back in September 2008, that leaves several questions unanswered, such as "Was the guarantee given an appropriate way to protect the banking system?" and "Given what we know of Anglo's deceptive practices, why hasn't the guarantee been withdrawn in the meantime, when a managed wind-down of Anglo would have had less dire consequences for other banks than a September '08 collapse?"

Going back to my original post, there is a mix of good and bad motives to explain every action the government has taken in relation to Anglo. Critics of the government look instinctively to the bad motives; defenders protest any mention of them. That's politics.
What would have been the course of events if Anglo had failed. Is there some document out there describing how letting anglo going to the wall would have led to worse misery then what we have to deal with today?

If it was of "systemic importance", what system are we talking of? is it just the system of shares, deposits, loans and properties the backers of this bank had or what? Have a small group of less then 100 people corrupted the government into following this course of action?

The link from [making jam] is excellent, the €25 billion could have paid for several Hadron Colliders, a 3 gorges dam or a maglev linking Cork to Belfast.
 

goosebump

Well-known member
Joined
May 23, 2008
Messages
4,940
(1) It was a private bank.
Irrelevant

(2) It had no systemic importance
It was in Sep 2008. 'Systemic' does not mean 'High Street'. It means that it owed an awful lot of money to depositors and bond holders.

(3) It was not equivalant to an "Irish" Lehman's investment bank
It actually is.

The reason for the bailout is quite simple.

Financial Markets are extremely complex, and no one can say with any certainty what impact a particular decision will have. This was discovered at great cost when the US Government decided not to support Lehmans.

In the aftermath of Lehmans, the EU Council decided that no Eurozone bank should be allowed to fail, in order to prevent any contagion spreading throughout the Eurozone banking system, which could undermine it completely.

The Irish Government subscribes to that policy, hence the support for Anglo.

The consequences of taking a unilateral decision on Anglo are unknown. We could walk away and the markets might not even notice; we could walk away and the markets could tear down our other banks.

The simple fact is that nobody knows, and while that uncertainty exists, the Government is sticking to the EU policy of supporting the banking system come what may.

However, the idea that we can just let Anglo fail with zero cost to the state is not realistic. There will be a cost: the question is whether or not is will be greater or less than supporting it.
 

goosebump

Well-known member
Joined
May 23, 2008
Messages
4,940
Why not just guarantee BoI and AIB and let the rest go to the wall? Why did Anglo have to be included?
You can't guarantee part of the banking system, as all banks have liabilities which relate to other banks, so if you allow one bank to go, you undermine the others.
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,814
You can't guarantee part of the banking system, as all banks have liabilities which relate to other banks, so if you allow one bank to go, you undermine the others.
so what was the degree of cross-funding and cross-collateralisation in September 2008 then Goosebump? specifically relating to Anglo and the other covered institutions.

give us the numbers to back up this grandiose assertion
 

Newsy

Well-known member
Joined
Aug 23, 2009
Messages
910
Irrelevant
I think goosebump this is a very through away comment.

YES, it is very relevant. This was a PRIVATE bank and now we are carrying the can for whatever decisions that were taken.

The vast majority of the country were probably NEVER inside anglo. It was a 'PRIVATE' club......so it IS very relevant.
 


New Threads

Popular Threads

Most Replies

Top