How much of our banking debt should be taken up by the Eurozone?

McDave

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There is much debate over the banking guarantee, and how the Irish taxpayer is being stiffed for speculative debts incurred with foreign, including Eurozone, lenders.

So, all things considered, how much debt should the Eurozone be actually taking off the backs of the Irish taxpayers?

- The entire debts run up by Anglo Irish Bank and INBS?
- All speculative lending debts run up by Irish banks?

Or should we accept that our lack of regulation was a factor in misleading lenders, and that this places a great(er) share of the responsibility on us?
 
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McDave

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For my own part, I think it is possible to establish the burden that should revert to lenders and speculators. Where I would start is by calculating the total amount lent to Anglo and INBS by non-Irish lenders, and applying a haircut to that amount that balances the risk taken by those lenders with the "contributory negligence" of the Irish state in not regulating Anglo/INBS. Say a 50:50 split?

I would leave the other Irish banks out of this calculation as I would argue the state's obligation to regulate systemic banks was higher than for the casino banks, and that lenders to them would have expected a more diligent approach by the Irish state.
 

Boy M5

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Given the events of the past 6 weeks I agree that there needs to be burden sharing - it is equitable. However, how would the blanket guarantee be viewed in law? Could we de-couple the different banks & treat the bondholders differently.

If we could take a clear view on this, I agree with your analysis re splitting AIB / BOI from INBS / Anglo.

I've been involved in negotiations with bond holders before in corporate debt restructurings. Suprisingly some bondholders, will buy bond debt in secondary market the anticipation of a debt - equity swap. So what is also needed is some form of analysis of the bondholders.
 

dresden8

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Arseholes who speculate and lose their money should not be bailed out by me.

Burden sharing my hole.

You gambled, you lost.

Fnck off.
 

blinding

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As I don't intend to pay any of it if I possibly can (not happy about bailing out gambling addicted bankers you see, not good for them or me)

Then if the EU feels that it is a good idea to bail out gambling addicted banker (bonkers I know) then they have my permission to do so. I will be refusing to contribute of course.
 

dresden8

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The question should read

"Why should the Eurozone's banking debts have been taken on by Irish taxpayers?"

The answer is still the same, take your debt and fnck off.
 

blinding

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I am really liking these last responses.

Its plain old common sense. Why should we bail out banking chancers ?
 
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DownTheyGo

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There is much debate over the banking guarantee, and how the Irish taxpayer is being stiffed for speculative debts incurred with foreign, including Eurozone, lenders.
There is? Where is this debate? Not happening with the Government or ECB, where it counts! Face it, the EU will not burden share on this issue. Ireland will be forced to default, the only question is when!! Everyone knows we got screwed on this to safeguard 'special interests' but there it is. Ireland will be busting a gut to make good on this debt but it will end tragically, a downward spiral from here. No ray of sunshine in this story.
 

McDave

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The question should read

"Why should the Eurozone's banking debts have been taken on by Irish taxpayers?"

The answer is still the same, take your debt and fnck off.
Why don't you set up your own thread posing that question? I'm dealing with a different issue, i.e. how to ameliorate a problem our government has caused by dealing with the matter structurally and forcing Eurozone lenders to take their share of the hit.

The problem as I see it is that unfortunately for Irish taxpayers, the government has indiscriminately committed the taxpayer to cover the losses of systemic banks lending to all kinds of borrowers and of speculators "borrowing" from the casino banks.

Irish people may feel aggrieved at being forced to bail out all manner of banks, but it is my contention that:

- the Irish people must take some level of responsibility for choosing governments with irresponsible economic policies and pocketing the gains McCreevy-Ahern-Cowen advanced to them; and

- the Irish state must take some level of responsibility for non-regulation of the banking sector and the damage done to the European financial system by allowing unregulated money/profit laundering through the IFSC.

When all the economic and political factors are taken into the mix, I think the debts incurred by Irish corporations, Irish citizens and the Irish state can be reduced by apportioning a percentage of that debt (and the fault fro that debt) to those who lent to Irish banks, and in particular the casino banks.
 

DownTheyGo

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I think the debts incurred by Irish corporations, Irish citizens and the Irish state can be reduced by apportioning a percentage of that debt (and the fault fro that debt) to those who lent to Irish banks, and in particular the casino banks.
Whats the plan, write a letter to Mr Trichet?? :roll:
 

McDave

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There is? Where is this debate? Not happening with the Government or ECB, where it counts! Face it, the EU will not burden share on this issue. Ireland will be forced to default, the only question is when!! Everyone knows we got screwed on this to safeguard 'special interests' but there it is. Ireland will be busting a gut to make good on this debt but it will end tragically, a downward spiral from here. No ray of sunshine in this story.
Maybe not with this government, which is on its last legs and is not taken seriously by anyone, let alone the EU or the IMF.

Our best hope is that a new government will agree a plan based on a hair cut for lenders to Anglo/INBS which they can present to the ECB and the IMF as a the only proper basis for an economic recovery in this country. If the Eurozone is serious about its sustainability, it will want to encourage responsibility and commitment to change from BI-PIGS. We can certainly do our bit in this regard, and we should be selling the benefits of Eurozone support for such a course of action.
 

McDave

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A hint from today's SB Post:

A source at the bond desk of French bank Societe Generale (Ciaran O'Hagan) criticised the Irish Government for socialising the debts of the banks. Allowing private sector default may have actually helped sovereign ratings.

[Kathleen Barrington, 'More austerity needed in Ireland, says Soc Gen', Money & Markets section - link up on Tuesday].
 

atlantic

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The Irish taxpayer should not be on the hook for any of the banks or bondholders end of story.The ECB should be made bailout the banks they printed the money , set the interest rates to low for the sake of the Germano's and created malinvestments all over the shop in Ireland and other smaller countries.By the time the whole lot pans out in Euroland our little 89 billion with look very small change .Print baby Print
There is much debate over the banking guarantee, and how the Irish taxpayer is being stiffed for speculative debts incurred with foreign, including Eurozone, lenders.

So, all things considered, how much debt should the Eurozone be actually taking off the backs of the Irish taxpayers?

- The entire debts run up by Anglo Irish Bank and INBS?
- All speculative lending debts run up by Irish banks?

Or should we accept that our lack of regulation was a factor in misleading lenders, and that this places a great(er) share of the responsibility on us?
 

Eire1976

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Lets be honest. The only reason tha Britain is giving 7 billion towards our alleged bailout is becuase they would be liable for all of it if we defaulted.

They are only looking out for themselves and leaving the Irish with a massive debt after they get paid back.
 

atlantic

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Paddyland has the Euro by the balls ,if the aholes that were negotiating weren't bought off.
The spiv's are supposed to represent the people that elected them ,well that's well and truly gone out the window.This bailout shyte should be put to the people ,who the fook do these people in government think they are, you get a vote every 5 years and then are told to piss off ya fooking numbskull we'll take from here and you'll have no choice in the matter because we are away smarter than you and the other 4.1 million.

Lets be honest. The only reason tha Britain is giving 7 billion towards our alleged bailout is becuase they would be liable for all of it if we defaulted.

They are only looking out for themselves and leaving the Irish with a massive debt after they get paid back.
 

atlantic

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He' s right.
A hint from today's SB Post:

A source at the bond desk of French bank Societe Generale (Ciaran O'Hagan) criticised the Irish Government for socialising the debts of the banks. Allowing private sector default may have actually helped sovereign ratings.

[Kathleen Barrington, 'More austerity needed in Ireland, says Soc Gen', Money & Markets section - link up on Tuesday].
 

McDave

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The Irish taxpayer should not be on the hook for any of the banks or bondholders end of story.The ECB should be made bailout the banks they printed the money , set the interest rates to low for the sake of the Germano's and created malinvestments all over the shop in Ireland and other smaller countries.By the time the whole lot pans out in Euroland our little 89 billion with look very small change .Print baby Print
Even if our government had had the guts to stiff Anglo and INBS, some of the ramifications would have found their way back to domestic targets like Irish banks and pension funds. You may say, "Grand, stiff them too". But while it's a view, I don't think it's one that would be politically acceptable to much of not most of the electorate whose everyday banking and pension prospects would have been put on the line. Then again, a private pension haircut might have been a relatively harmless option under the circumstances.

I still think it's misguided for the Irish state and Irish taxpayers to argue that the whole affair is really none of their business. The Irish government (as duly appointed through successive democratic mandates) failed to act prudently, and even stoked the fire using the IFSC to beggar the tax revenues of other EU states. Also Irish taxpayers indiscriminately borrowed to fund property, asset and consumer purchases. Individual action also compromised the personal solvency of individuals and the financial institutions they borrowed from.
 

McDave

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Paddyland has the Euro by the balls ,if the aholes that were negotiating weren't bought off.
The spiv's are supposed to represent the people that elected them ,well that's well and truly gone out the window.This bailout shyte should be put to the people ,who the fook do these people in government think they are, you get a vote every 5 years and then are told to piss off ya fooking numbskull we'll take from here and you'll have no choice in the matter because we are away smarter than you and the other 4.1 million.
That theory might have worked had Ahern been elected once. But the Irish electorate in its "wisdom" insisted in voting him and his cronies in three times in succession. That was carte blanche to continue inflating the bubble and beggar our neighbours in the process.
 


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