September 29/30, 2008 - why did the mistake happen? Can it happen again?

anewbeginning

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If we guaranteed Anglo Irish Bank, it would mean a disaster for the Irish state. If we didn't guarantee Anglo Irish Bank, likewise it would mean a disaster.

That's the barrel the government and the taxpayer are over at the moment, all because of a couple of idiots in Anglo and their developer cronies who borrowed big but had no sustainable business plans other than to keep building hotels, houses and apartments, that no-one wanted.

It's almost impossible now to undo the damage that Anglo has done to the Irish economy. We are paying at least 2% extra on our bond interest rates because of Anglo.
 


richie268

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Willem Buiter's take on the blanket guarantee(FT 2/10/08)is a cautionary interpretation which concludes with a prescient hope for the pockets of Seán Taxpayer.
The Irish solution: unlawful, beggar-thy-neighbour and short sighted, but apart from that OK | Willem Buiter's Maverecon | FT.com
I read that again
I might start a thread (Questions for those running Anglo) I have many questions and the freedom of information act comes into the equation for some reason, I think we need to know and investors need know the truth about the banks and any bastard caught spoofing should be considered an enemy of the state!
I simply think the people should be told the truth.
Get it over with if you know what I mean,
Here is a question,
How much money was transferred from other Irish banking institutions to Anglo in September 2008?
Simple Question but I wont get an answer because the answer would lead to another question and we can not have that because that is talking down the economy.
 

goosebump

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The Guarantee is meaningless in terms of the banks being recapitalised by the State. Its continuing function is to shore up liquidity.

Even if there was no Guarantee, we'd still be recapitalising Anglo. The Guarantee itself can be ditched in a couple of hours in the Dail.

If the Guarantee were final and binding, Eamon Gilmore and Enda Kenny wouldn't be going around saying they'll negotiate with the bondholders when they're in power.

This whole idea that the entire country is on the hook because of the events of the night of Sep 30 2008 is ridiculous.

We're on the hook because its EU policy that no bank reneges on its debts.
 

anewbeginning

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Iceland defaulted on paying back bondholders, and now the Icelandic economy has a much brighter future than Ireland's.

I think it's past time the IMF were called in and let them sort this out.

At the moment, Ireland Inc has no economic future with Cowen and Lenihan calling the shots. It's time to get experts involved, even if the short term pain will be bad.

The IMF don't have to face the electorate in Ireland, whereas Cowen and Lenihan do. Everything Cowen/Lenihan do, is with one eye on future elections. They don't want to be the ones who had the IMF in on their watch.

Politicians are not the people to deal with Anglo and the bond holders. You need someone independent.
 

richie268

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The Guarantee is meaningless in terms of the banks being recapitalised by the State. Its continuing function is to shore up liquidity.

Even if there was no Guarantee, we'd still be recapitalising Anglo. The Guarantee itself can be ditched in a couple of hours in the Dail.

If the Guarantee were final and binding, Eamon Gilmore and Enda Kenny wouldn't be going around saying they'll negotiate with the bondholders when they're in power.

This whole idea that the entire country is on the hook because of the events of the night of Sep 30 2008 is ridiculous.

We're on the hook because its EU policy that no bank reneges on its debts.
I accept your point however I am of the belief that both major banks were solvent in September2008 and a flow of liquidity was agreed between the DOF and the banks in order to shore up Anglo which in turn opened the flood gates and now we are where we are.
 
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He3

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goosebump

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He3

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More details emerging about panic stations

More details oozing out about panic in government circles at the time via the PAC documented by Simon Carsley.

ANALYSIS: RECORDS RELEASED by the Department of Finance reveal the dramatic back-room scramble at the height of the financial crisis in late September 2008 to quantify the scale of the run on the Irish banks, which of the banks would run out of money first, and when.

The documents – released to the Public Accounts Committee – show how in the run-up to the Government bank guarantee on the night of September 29th-30th, the department was desperately trying to get a grasp on the potential losses of the banks.

PricewaterhouseCoopers (PwC) estimated on Sunday, September 28th that Anglo, Irish Nationwide and Irish Life Permanent (ILP) could have about €5 billion in bad debts under a “stressed case”, but an accelerated run-off of their loan books would give rise to “significantly higher levels of provisions”. This sum has since reached €40 billion – almost all due to Anglo and Nationwide.


Dramatic bank-crisis scramble revealed - The Irish Times - Wed, Oct 20, 2010
 


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