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Does Ireland still have too many Banks?


Expatriot

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"Despite improving market sentiment, Irish banks are still making losses and may require yet more capital, while banking and sovereign debt will remain linked for years to come"BUSINESS WORLD - S and P: Irish banks need more capital


If we are required to pump more money into the loss making banks should we first look at consolidation in the sector?

Do we really need more than one state owned bank branch in each town in the country?

Competition is an issue, but not in the dysfunctional marketplace we current operate in surely.

How would people feel about the Anglo solution being more widely applied if more capital is required?
 

revolution

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Yes this country still has too many banks,they are all dead tho,all pillar/dead-banks,
FG had a good idea with a "National recovery" good bank,but its gone by the wayside..... go figure
 

DownTheyGo

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The number of banks is not the problem. Its the number of loans.
But if a critical source of income to banks is the interest it nets off from making loans then the more banks that exist, the greater the number of loans to be made and consequently, risk management rules subside. Although not an issue in present climate; could potentially happen again, no one wants to go back there! With Anglo and INBS out of the market, the number of lending institutions has fallen. What is probably of more concern here is the rise in credit institutions, legal loan sharking at massive rates of interest. This can't be too healthy for a vibrant economy but fully employed people are turning to such because it has become the only source of loans for many.
 

EUrJokingMeRight

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The title should be 'Two many banks' surely?
 

Expatriot

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The number of banks is not the problem. Its the number of loans.
So having multiple loss making state owned branches in each town is okay long term?

But no Garda station.
 

Expatriot

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I have never heard a logical explanation as to why AIB & BOI are needed.
Well at least we don't own BoI so they are their own problem.
 

Kev408

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Yes this country still has too many banks,they are all dead tho,all pillar/dead-banks,
FG had a good idea with a "National recovery" good bank,but its gone by the wayside..... go figure
If only they were in power...
 

Expatriot

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NYCKY

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Competition is needed among the banks. While banks might the prolariat's bete noire these days, think of what would occur under further consolidation.


Less options, less branches, less service, higher fees, longer wait times etc. A competitive banking sector is necessary in any economy. Also once AIB is cleaned up it should be refloated and get something back for the taxpayer.
 

Pinster

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I have never heard a logical explanation as to why AIB & BOI are needed.
Because they are not needed at all, it's all political spin, there is also no explanation as to why they should make huge profits either.

We already have a good network of credit unions that should be kept small and solvent.

All people really need is a place to lodge /withdraw cash, a system of electronic payments/transfers and access to small amounts of credit, big companies should spread their deposits/credit needs evenly.

For all the rest you can fly to Las Vegas.
 
Last edited:

Papillon

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Sep 21, 2012
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We have far too few banks actually, one of the major problems highlighted by the financial crisis is that our retail banking industry is far far too concentrated in banks which then become of strategic importance (too big to fail) to the country and also that the European banking system as a whole is too balkanised.

We should be looking to consolidate our banks with other banks in Europe which don't have an operation in Ireland such that individual country risk becomes mutualised across Europe. ie break up AIB and BOI into parts of no greater proportion of 10% of the Irish banking market and sell them off to whatever European bank that'll have them; Societe Generale, Commerzbank, UniCredit, whoever.
 

Disillusioned democrat

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The title should be 'Two many banks' surely?
That's actually the real problem. You can't have too many banks as long as the government/taxpayer doesn't need to pick up the tab if they go belly up. Competition is a good thing.

We have two anointed "pillar" banks that are considered so systemic that they will never be allowed fail and yet our government have no control over them, but that artificially distorts the whole sector -the pillar banks don't need to be competitive, so therefore neither do the others, so we're in a limbo of having loads of banks but no competition.
 

Howya

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I have never heard a logical explanation as to why AIB & BOI are needed.
The theory goes that by having two banks there is a fig leaf attempt at showing there is a competitive market place. And that eventually both will be back in private hands eventually. I also think that if AIB had been nominated as "dead" bank then the follow on consequences for running down the loan book, bad debt provisions, staff redundancies would have overwhelmed the DoF. (that of course is not necessarily a logical or even good reason for keeping AIB on life support).

Without BoI/AIB the ecomomy would not have a payment system. What the government should have done back in 2009/2010 (or from 2011) is to ramp up An Post to be able to function as a simple deposit/payment system. A loan division could then have been set up to support the SME's etc.

Edit - and since there is post office in most town's there is no need to create a new network.
 

Inda Kenny

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Apr 6, 2010
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519
"Despite improving market sentiment, Irish banks are still making losses and may require yet more capital, while banking and sovereign debt will remain linked for years to come"BUSINESS WORLD - S and P: Irish banks need more capital


If we are required to pump more money into the loss making banks should we first look at consolidation in the sector?

Do we really need more than one state owned bank branch in each town in the country?

Competition is an issue, but not in the dysfunctional marketplace we current operate in surely.

How would people feel about the Anglo solution being more widely applied if more capital is required?
Its not the number of banks its the staff untrained in dealing with people who have serious financial issues. Experienced staff at BOI are being allowed to take the early exit package. Result some of them are now setting up debt advisory services. Whats left in the bank recent graduates and people with a serious lack of experience. I would suggest some training courses in basic finance for all staff of all banks.
 

SideysGhost

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Nov 30, 2009
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I would suggest some training courses in basic finance for all staff of all banks.
That would have been handy about 16 years ago alright.

Irish banks only understand property loans. They've no interest in, no experience of, no competence in, no culture which understands or wants to understand, anoything other than bloody property. The number of banks isn't the problem, it's Irish banking culture....which in fairness is only an extension of the broader culture.

The only reason 99% of people in Ireland want solvent banks is so they can start firing out the 40-year 100% interest-only mortgages again. One for everyone in the audience, fill yer boots.
 

Ribeye

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Jul 12, 2011
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Em, the only banks we have in Ireland are at the sides of rivers and at recycling centres,

I don't know what those things in Dublin 2 are, but I know what they ain't, and they ain't banks,
 

Kev408

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Feb 26, 2006
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5,124
What's the difference between 100 banks and 5 banks? Customers will choose their bank based on the offers presented. I don't get the question.
 
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