Elderfield contradicts Lenihan on senior bondholders

He3

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The government has tried to hold the line that senior bondholders must be paid in full. That line may not be sustainable for much longer.

Financial Regulator Matthew Elderfield has told a Dáil committee that the Government could enter negotiations with senior bondholders to share some of the cost of the bank bailout.

RT News: Financial Regulator will intervene with banks

When do the negotiations begin? And how much has been returned to senior bondholders at a wasteful 100% return rate so far?
 


sic transit

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You might do well to actually watch what he said rather than trust the RTE website to summarise what he said. He did say that but he mentioned it in the context of offering them alternatives options - like an early cash in at a reduced rate. He saw no reason why it wasn't a possibility, but he did not contradict Lenihan. Sean Whelan later suggested that the savings would most likely be of limited value assuming the negotiations even happened.
 

Chrisco

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You might do well to actually watch what he said rather than trust the RTE website to summarise what he said. He did say that but he mentioned it in the context of offering them alternatives options - like an early cash in at a reduced rate. He saw no reason why it wasn't a possibility, but he did not contradict Lenihan. Sean Whelan later suggested that the savings would most likely be of limited value assuming the negotiations even happened.
Well, if Sean 'Economic Whizzkid' Whelan said it...
 

nicht besonders

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Hasn't Lenihan been saying it would illegal to do this though, giving the impression it is impossible?
 

Nipper

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Hasn't Lenihan been saying it would illegal to do this though, giving the impression it is impossible?

That's just the standard Lie

Works for everything from paying the likes of fingers a massive pension to the state paying for the sins of the Catholic Church, or not applying levies on Judges pay.
 

Biffomania

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Illuminating that it's not earth-shattering anymore when the Financial Regulator, or the markets, or the Governor of the Central Bank, or the FT or the Wall Street Journal, etc. etc. contradict or disagree with our MoF. He's a busted flush...............at a rough guess only about 24%/25% of the electorate are dumb enough to believe anything he says anymore. He's gone from Hero to Zero at about the same pace as Boss Biffo. He's as relevant as elevator muzak - 24 months of getting it consistently wrong has switched off all but the pathetic party faithful.
 

MPB

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Hasn't Lenihan been saying it would illegal to do this though, giving the impression it is impossible?
Anything in Ireland that could affect the staus quo is illegal. Irelands rich elite need to be bailed out by ordinary Irish Taxpayers and nothing is going to prevent FF from achieving this.

If they did not do this, how would the FF donors be expected to afford all the State assets that are due to come on the market.
 

cozzy121

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That's just the standard Lie

Works for everything from paying the likes of fingers a massive pension to the state paying for the sins of the Catholic Church, or not applying levies on Judges pay.
Daddy must be soo proud of him. The ff apple doesn't fall far from the tree..
 

Barnacle

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The Government seem totally unwilling to enter into any type of negotiations with these bondholders. Makes you wonder why and who are these bond holders. Their unwillingness to entertain the option may be explained if we knew who the bondholders were. Will we ever find out.
 

sport02

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The Government seem totally unwilling to enter into any type of negotiations with these bondholders. Makes you wonder why and who are these bond holders. Their unwillingness to entertain the option may be explained if we knew who the bondholders were. Will we ever find out.

Have you noticed the imeptitudes in control of our soverignty and finances, they make Bill Cullen's apprentices look smart.
 

goosebump

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Hasn't Lenihan been saying it would illegal to do this though, giving the impression it is impossible?
He has never said it would be illegal.

It said that it was a legal requirement to treate Senior Debt and Depositors in the same way, and given that there is €50bn in deposits, and €16.5bn in Senior Debt, asking the Senior Debt holders to accept losses would result in an overall loss that would be greater than the loss involved in paying the Senior Debtors in full, as the Government would have to trigger the deposit guarantee.
 

goosebump

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The Government seem totally unwilling to enter into any type of negotiations with these bondholders. Makes you wonder why and who are these bond holders. Their unwillingness to entertain the option may be explained if we knew who the bondholders were. Will we ever find out.
The bonds are traded securities that change hands on the financial markets.

You don't know definitively to whom the capital value is owed until they are presented for fulfilment at maturity.
 

HarshBuzz

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The bonds are traded securities that change hands on the financial markets.

You don't know definitively to whom the capital value is owed until they are presented for fulfilment at maturity.
mainly pension funds according to yourself

little old ladies and the like :rolleyes:
 

EvotingMachine0197

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The Government seem totally unwilling to enter into any type of negotiations with these bondholders. Makes you wonder why and who are these bond holders. Their unwillingness to entertain the option may be explained if we knew who the bondholders were. Will we ever find out.
Well whoever they are:

  • Have enjoyed gambling and winning on Anglo in the years running up to the crash.
  • Have been guaranteed any losses subsequent to the crash
  • May have their entire ante refunded by the taxpayer with knobs on
  • Can re-enter the bond market or property market at the bottom with their full ante assured - multiplying the potential for personal wealth growth.
Bastards.
 

HarshBuzz

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FT Alphaville has picked up on this. All the Irish banks debt has been placed on the potential downgrade list.

I'd say Elderfield is probably on the receiving end of a tirade from Lenihan right about now.
 

Nipper

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He has never said it would be illegal.

It said that it was a legal requirement to treate Senior Debt and Depositors in the same way, and given that there is €50bn in deposits, and €16.5bn in Senior Debt, asking the Senior Debt holders to accept losses would result in an overall loss that would be greater than the loss involved in paying the Senior Debtors in full, as the Government would have to trigger the deposit guarantee.
Firstly what legislation backs this up and

This would not be a problem if we had let the garauntee expire as planned and burned depositors and bondholders.

The truth is simple, it's just the spin that is hard to keep up with.
 

HarshBuzz

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money quote from Moodys: my own addendum in italics

Therefore, the review of the banks’ deposit and debt ratings will take into account the government’s (a) ability and (b) willingness to support its banking system following the outcome of the review of the government bond rating
(a) and (b) are no longer mutually inclusive

St Lendahand may have staked his soul on guaranteeing senior debt. The markets are about to tell him he's not able to.

No prizes for guessing who wins that little contest
 

Dreaded_Estate

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He has never said it would be illegal.

It said that it was a legal requirement to treate Senior Debt and Depositors in the same way, and given that there is €50bn in deposits, and €16.5bn in Senior Debt, asking the Senior Debt holders to accept losses would result in an overall loss that would be greater than the loss involved in paying the Senior Debtors in full, as the Government would have to trigger the deposit guarantee.

The senior bondholders we would be imposing losses on are no longer guaranteed, so they cannot trigger the guarantee.
 

Barnacle

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He has never said it would be illegal.

It said that it was a legal requirement to treate Senior Debt and Depositors in the same way, and given that there is €50bn in deposits, and €16.5bn in Senior Debt, asking the Senior Debt holders to accept losses would result in an overall loss that would be greater than the loss involved in paying the Senior Debtors in full, as the Government would have to trigger the deposit guarantee.
Did he actually say that there is a legal requirement to treat Senior Debt and Depositors in the same manner or is this a line that he is trying to spin. I recall him saying something like - you cannot default on this debt, these are the same bond holders that you are relying on to borrow from.
 


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