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How did AIB pass EU stress test ?




TonyB

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Sep 29, 2009
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technopolitics
There are people in high places - politicians, civil servants, regulators, bankers - who have failed in the exercise of their duties, that have led us to where we are now. Similarly, there are people in not so high places - civil servants, regulators, bankers, political advisors - who also failed. They were negligent, incompetent, undertrained, poorly led, badly advised, call it what you will - they made mistakes.

This is true in this instance (I don't see how it cannot be - either the test was flawed, in which case the framers of the test, presumably European Civil Servants, failed; or the execution of the test was flawed; or the bankers didn't provide the right information, for whatever reason. It is also true in so many of the other processes that have led us to this unfortunate place.

In very few of these cases I would submit people deliberately did wrong. In my view, I think most people would agree with that. By extension therefore, most people were simply trying to do their jobs. That will have resulted in cover-ups, airbrushing, and the denial of "access to the truth" in the interests of those people who made mistakes. There's nothing criminal here, it's just the way things work.

So the answer to your question is simply "no".
 

sport02

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Sep 25, 2010
Messages
19,640
This question was posed to former minister of Finance,Ruairi Quinn, on newstalk a few weeks ago, to which he replied "I don't know, that is the 64,000 dollar question"
 

cobra

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Sep 15, 2010
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440
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dont do twittering nonsense
Get Real. All the (w) bankers have known for for YEARS
that AIB was a busted flush.
 

Furze

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Jun 14, 2007
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781
A Greek examined the Balance Sheet - hey presto!:)
 

cry freedom

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2,400
This question was posed to former minister of Finance,Ruairi Quinn, on newstalk a few weeks ago, to which he replied "I don't know, that is the 64,000 dollar question"
That would leave him out by a factor of 1000, would it not?
 

cry freedom

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Joined
Nov 8, 2009
Messages
2,400
There are people in high places - politicians, civil servants, regulators, bankers - who have failed in the exercise of their duties, that have led us to where we are now. Similarly, there are people in not so high places - civil servants, regulators, bankers, political advisors - who also failed. They were negligent, incompetent, undertrained, poorly led, badly advised, call it what you will - they made mistakes.

This is true in this instance (I don't see how it cannot be - either the test was flawed, in which case the framers of the test, presumably European Civil Servants, failed; or the execution of the test was flawed; or the bankers didn't provide the right information, for whatever reason. It is also true in so many of the other processes that have led us to this unfortunate place.

In very few of these cases I would submit people deliberately did wrong. In my view, I think most people would agree with that. By extension therefore, most people were simply trying to do their jobs. That will have resulted in cover-ups, airbrushing, and the denial of "access to the truth" in the interests of those people who made mistakes. There's nothing criminal here, it's just the way things work. So the answer to your question is simply "no".
Have we learned nothing then?
Will it all drift back to "business as usual"?
If those minions who covered up their bosses corruption lived in danger of getting their arses severely roasted then perhaps we could build a platform from which we could move forward.
If that proves to be impossible perhaps we should abandon the whole structure.
 

kerdasi amaq

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The test was organised in accordance with "progressive" liberal principals; no one fails and everyone passes.
 

TonyB

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technopolitics
Have we learned nothing then?
Will it all drift back to "business as usual"?
If those minions who covered up their bosses corruption lived in danger of getting their arses severely roasted then perhaps we could build a platform from which we could move forward.
If that proves to be impossible perhaps we should abandon the whole structure.
Right...re: back to normal? Yes. It's what Fintan O'Toole's been writing about in the IT for some time that the crime here is not what happened, but that all our planning for recovery envisages a future where everything was just like it was before - i.e. a ticking bomb.

Corruption is a different thing - I don't think most of what went on was in fact corrupt. Most of the bankers, politicians, and developers got screwed here. It was just stupid. We jump to "corrupt" because it's easier to be angry with someone who deliberately wrongs us, who pokes a finger in our eye, that we can blame. But in truth, it's mostly about mistakes and human error, judgement calls that were well intended but wrong. It's far more difficult to be angry at someone who was stupid.

Building a new platform, abandoning the whole current structure - that all implies revolution. Actually, Merkel's comments on multiculturalism have more to say about this - it's all related. How we choose to manage and govern ourselves - that's what this is about.
 

Maximus Cynicus

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Apr 7, 2010
Messages
1,075
But in truth, it's mostly about mistakes and human error, judgement calls that were well intended but wrong.
I cannot accept that it's that simple. The principles of sound underwriting have been established for many a year. If there was, for example, a requirement for a maximum mortgage amount of 2.5 times salary in existence, why was this in existence? I suggest it was based on prudent lending principles, perhaps backed up by some actuarial work.

I know the rating principles behind insurance practices better and this is how the London operation of the Insurance Corporation of Ireland caused so much grief 25 years ago, by abandoning same.

On a commercial lending basis, there seems to have been similarly lax practices creeping in; land title documentation not complete, etcetera

So we need to ask why were long established practices apparently discarded? I'm not a fan of the well intended but wrong idea. I am a fan of the "greed" excuse whereby bonuses and perks were paid based on "profits" stated. Cheap money was obtained, shovelled into the market, mortgages repackaged and sold into the secondary market.

Now we're getting this Milgram experiment "I wuz only following orders, guv" which, quite frankly, is fine at a certain level within the bank, the enlisted personnel. But the big bonus takers, the officer corps, knew exactly how it would all end if you ignored standard banking practice, and not in that bullsh1t soft landing either
 

cry freedom

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Nov 8, 2009
Messages
2,400
I cannot accept that it's that simple. The principles of sound underwriting have been established for many a year. If there was, for example, a requirement for a maximum mortgage amount of 2.5 times salary in existence, why was this in existence? I suggest it was based on prudent lending principles, perhaps backed up by some actuarial work.

I know the rating principles behind insurance practices better and this is how the London operation of the Insurance Corporation of Ireland caused so much grief 25 years ago, by abandoning same.

On a commercial lending basis, there seems to have been similarly lax practices creeping in; land title documentation not complete, etcetera

So we need to ask why were long established practices apparently discarded? I'm not a fan of the well intended but wrong idea. I am a fan of the "greed" excuse whereby bonuses and perks were paid based on "profits" stated. Cheap money was obtained, shovelled into the market, mortgages repackaged and sold into the secondary market.

Now we're getting this Milgram experiment "I wuz only following orders, guv" which, quite frankly, is fine at a certain level within the bank, the enlisted personnel. But the big bonus takers, the officer corps, knew exactly how it would all end if you ignored standard banking practice, and not in that bullsh1t soft landing either
Targets and ego play a big part in my opinion.
Targets are set and must be met or else you are made to feel like a pillock at the next management meeting.
Peoples ego goes into overdrive when the dick measuring about bonus earned is displayed at these meetings.
Share holders are the new robber barons of the capitalist world.
Immediate large profits are demanded at shareholder meeting rather than solid strategic growth. Long term planning is relegated to the side lines to
clear the way for sexy reports from CEOs who now have the same job security as the manager of a hard up football team.
 

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