Government considers public-banking

Dame_Enda

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The Minister for Rural Affairs, Michael Ring, has announced he will bring a report examining introduction of German-style public-banking in Ireland.. The proposal is that they will be municipally owned as opposed to nationalised. Deposits would accrue no interest, but in return the deposits would be secured and loans up to 15 years offered on more favourable terms than commercial banks at fixed rates.

Labour TD Willie Penrose expressed fears the "bureaucrats" and "mandarins" in the Dept of Finance will block it. Good idea or not?
 


mr_anderson

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The Minister for Rural Affairs, Michael Ring, has announced he will bring a report examining introduction of German-style public-banking in Ireland.. The proposal is that they will be municipally owned as opposed to nationalised. Deposits would accrue no interest, but in return the deposits would be secured and loans up to 15 years offered on more favourable terms than commercial banks at fixed rates.

Labour TD Willie Penrose expressed fears the "bureaucrats" and "mandarins" in the Dept of Finance will block it. Good idea or not?

''municipally owned as opposed to nationalised''
So who bails them out when they inevitably go títs-up ?
 

brughahaha

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The Minister for Rural Affairs, Michael Ring, has announced he will bring a report examining introduction of German-style public-banking in Ireland.. The proposal is that they will be municipally owned as opposed to nationalised. Deposits would accrue no interest, but in return the deposits would be secured and loans up to 15 years offered on more favourable terms than commercial banks at fixed rates.

Labour TD Willie Penrose expressed fears the "bureaucrats" and "mandarins" in the Dept of Finance will block it. Good idea or not?
Can you imagine who the board appointees will be , what the lunch and mileage expenses will be like , the "leaving " parties

Sounds like it could be another Sligo council financial black hole and rip off TBH
 

Dame_Enda

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''municipally owned as opposed to nationalised''
So who bails them out when they inevitably go títs-up ?
Well 40% of German deposits are in public banks and German banks weathered the 2008 crisis while Anglo Irish Bank collapsed.
 

Schuhart

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Can't see the point of it. Even German public banks went a bit gonzo.
https://www.forbes.com/sites/francescoppola/2017/10/24/the-wondrous-german-public-sector-banks-arent-all-they-are-cracked-up-to-be/#51b922166c69

<...>Germany's regional banks -the Landesbanken - have looked like the living dead ever since the financial crisis wrecked their balance sheets. One of them, WestLB, collapsed in 2008 as its holdings of US mortgage-backed securities became worthless (yes, I know, why was a wondrous German public sector bank investing in U.S. toxic waste?) and was eventually broken up in 2012. The remaining seven - with the possible exception of LBBW - are in varying stages of zombification: inefficient, undercapitalised, poorly profitable and infested with non-performing loans. <...>

But wait. What about the Sparkassen? Aren't they the eighth wonder of the world - publicly owned savings banks whose lending to local enterprises supports the German economic miracle? <...>

Sadly, the reality is not so good. Prior to the crisis, the Sparkassen were the majority owners of the Landesbanken. Faced with an excess of savings from thrifty German households and insufficient productive lending opportunities in their local communities, they dumped the excess savings into the Landesbanken, which used them as funding for investments in Irish and Spanish property, Greek sovereign debt, US mortgage backed securities and - as we have just discussed - shipping loans. So much for Sparkassen keeping their capital in local communities.

When the Landesbanken failed, the Sparkassen - as their owners - should have funded their losses, even if it meant failing themselves. But instead, the German public authorities bore the losses, while the Sparkassen walked away unscathed. The Sparkassen have now sold their stake in the Landesbanken to the German public authorities.
 

cricket

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The municipal authorities can't properly organise the services they currently provide ffs.
 

PBP voter

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''municipally owned as opposed to nationalised''
So who bails them out when they inevitably go títs-up ?
In future if private banks fail the bondholders take a hit but the public still pay.

Thank the EU and their backers FFG SF Lab Green etcs
 

PBP voter

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Can they not just expand the bank service an Post provides? In between the three hour breaks that their staff take?

They already offer current and deposit accounts.
 

Old Mr Grouser

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The Minister for Rural Affairs, Michael Ring, has announced he will bring a report examining introduction of German-style public-banking in Ireland.. The proposal is that they will be municipally owned as opposed to nationalised. Deposits would accrue no interest, but in return the deposits would be secured and loans up to 15 years offered on more favourable terms than commercial banks at fixed rates.

Labour TD Willie Penrose expressed fears the "bureaucrats" and "mandarins" in the Dept of Finance will block it. Good idea or not?
Why couldn't it be established and run as a department of An Post?

That's how such a bank was set up in the UK, in 1968.
 

Spanner Island

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''municipally owned as opposed to nationalised''
So who bails them out when they inevitably go títs-up ?
Why would they have to go t!ts up?

I did think at the height of the banking crash that it would have been good if post office banking could have been ramped up as a place to shift money to and let the chips fall where they may wrt to AIB, BoI and the rest of the parasites...
 

Spanner Island

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Can you imagine who the board appointees will be , what the lunch and mileage expenses will be like , the "leaving " parties

Sounds like it could be another Sligo council financial black hole and rip off TBH
As opposed to what BoI and AIB et al indulge in... yeah... sure... they're so great at doing the auld banking thing and haven't cost us billions which we'll be paying off for decades...

A bit of competition wouldn't hurt...
 

brughahaha

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As opposed to what BoI and AIB et al indulge in... yeah... sure... they're so great at doing the auld banking thing and haven't cost us billions which we'll be paying off for decades...

A bit of competition wouldn't hurt...
Yeah ...a true FG'er ....more connected snouts at the trough at the expense of the taxpayer needed :roll:
 

Trainwreck

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Well 40% of German deposits are in public banks and German banks weathered the 2008 crisis while Anglo Irish Bank collapsed.
Are you kidding me?

A Landesbank ( SachsenLB) was the very first bank in the world to collapse during the GFC.

We really can't have informed discussions unless people, you know, inform themselves.
 

Dame_Enda

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Are you kidding me?

A Landesbank ( SachsenLB) was the very first bank in the world to collapse during the GFC.

We really can't have informed discussions unless people, you know, inform themselves.
But a study of public banking in Brazil found that "the impact of the 2008 crisis on the Brazilian economy was rather limited because the Brazilian Central Bank together with the public banks supplied sufficient liquidity for non-financial agents." Also in Germany the picture was more mixed, with Landesbank (Helaba) weathering the crisis. The latter bank established strict control and monitoring mechanisms following a crisis in the 1970s, while Landesbank (WestLB) dropped such controls.
 

Trainwreck

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But a study of public banking in Brazil found that "the impact of the 2008 crisis on the Brazilian economy was rather limited because the Brazilian Central Bank together with the public banks supplied sufficient liquidity for non-financial agents." Also in Germany the picture was more mixed, with Landesbank (Helaba) weathering the crisis. The latter bank established strict control and monitoring mechanisms following a crisis in the 1970s, while Landesbank (WestLB) dropped such controls.

And Australia and New Zealand...?


Don't make misattribution.


No, the Landesbank were a mess. They cost German taxpayers a bucket load of money.


Your premise (state owned banks avoided and were inherently more resilient during the GFC) has no theoretical basis, and is contradicted by the facts (the German Landesbank were badly affected, but Australian and New Zealand banks were not affected at all).
 

CookieMonster

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Can they not just expand the bank service an Post provides? In between the three hour breaks that their staff take?

They already offer current and deposit accounts.
Didn't An Post try that with the venture with Fortis (which also collapsed as a result of the crisis, so you know it's not just an Irish thing) Postbank?
 


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