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Total cost of Irish Bank Bailout - €50bn++


Dreaded_Estate

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This may not be news but it is worth seeing all the figures together.

The total cost of the Irish bank bailout looks like it is going to easily top €50bn.

The estimate provided by the DoF is for €46.26bn



But this excludes the €3.3bn additional that AIB will need bringing the total to €49.56bn.

But it also excludes the interest on the promissory notes.

This will add at least another €8bn to the total bringing the total to €57.56bn.

This excludes any potential cost from NAMA and the worst case scenario from Anglo which could add another €10bn to the total.

So overall we are looking at cost somewhere between €55bn and €65bn.

That puts the range at somewhere between 42% of GNP and 50% of GNP.
 

He3

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The people who put us on the hook - elected representatives and 'higher' civil servants - should be out on their ear.
 

LeDroit

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That puts the range at somewhere between 42% of GNP and 50% of GNP.
Ah, but the important letters are 'N' and 'D'. If you don't live in Ireland those stats mean nothing.

Adios suckers!
 

FakeViking

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The people who put us on the hook - elected representatives and 'higher' civil servants - should be out on their ear.
Not only are they not behind bars (which is what I assumed you meant by your euphemistic ear), they think they have the right to commit our country to another four years of failure, just like the four year plan, and the one before that.
 

Squire Allworthy

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So overall we are looking at cost somewhere between €55bn and €65bn.

It takes exceptional talent to run up losses of this magnitude.

To do so and remain in office requires spectacular ability.

Or it tells me all I need to know about the Irish political system and the senior civil service. Are concepts like accountability and accepting responsibility alien in the land of Ireland?

The Minister of Finance should accept responsibility and resign as should his predecessor. Those advising need to be purged by whoever follows.
 

Social Conscience

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Great (if depressing) thread. Where online can I get to view/print this document?
 

Hewson

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It takes exceptional talent to run up losses of this magnitude.

To do so and remain in office requires spectacular ability.

Or it tells me all I need to know about the Irish political system and the senior civil service. Are concepts like accountability and accepting responsibility alien in the land of Ireland?

The Minister of Finance should accept responsibility and resign as should his predecessor. Those advising need to be purged by whoever follows.
The short answer is yes. It's a peculiarity I think is unique to this country and I could never figure out quite why. Maybe it's just a historical legacy from the days when we survived by our wits and spent most of our lives trying to dodge any backlash from our British rulers for our misdeeds.

I can really think of no country, other than dictatorships, where such catastrophic incompetence and misrule could go unpunished.
 

hammer

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At least the banks will start lending again to SMEs in the middle of a "depression" :( where consumers disposable income will reduce considerably.

Interesting how many SMEs will prepare projections for the next 4 years showing growth !!!!!

€60,000 million down the drain......................
 

Cassandra Syndrome

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I always said €100 Billion including NAMA and opportunity cost.

Even if the insolvent banks could lend, people and businesses are too saturated with debt to borrow any more. Its simply mathematically impossible to service between 500% and 1000% of your income. The only debt free people are the shrewdies who will definitely never borrow now, Pensioners or young cubs.

Its the same in the States, Bernanke doesn't get it. He can go through QE3, QE4 to infinity, but people and firms simply do not want to borrow. So all he is doing is creating hyperinflation.
 

hammer

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..........and interest rates will only be going in one direction very shortly.

Upwards very quickly :(

As if people will load up on debt. Pay no-one instead seems to be the policy.
 

MPB

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When will Govts understand that there is no point in saving Banks. They have outlived their usefulness.

If people cannot afford to borrow and Banks cannot afford to lend, what is the point in throwing over 60 billion at these institutions.

The system needs to collapse. It is beyond repair.
 

Holy Cow

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It will be at least €100 billion, and more than likely a lot more. Anybody who thinks it will be less is codding themselves.
 

WTTR

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Who listens anymore?

The bailout so far only represents short term loans e.g. developers, property speculators which are gone bad. The whole idea of these loans was to turn the property over quickly so that they could be offloaded at a 2005 profit basis of c. 200-300% to holders of long term mortgages.

There is already officially €120Bn in retail mortgages out there, before the young people of Ireland decided that this was enough. Now for the size of the country, it is my estimation that we could only afford to service €40Bn. Houses do not generate income for the country; therefore borrowing from abroad is bad economics etc. This should be obvious to anybody that has a basic commerce degree.

There is over €80Bn in Retail Mortgage Backed Securities out there. The money for this is mainly from abroad. There is also a big whack of Commercial Mortgages funded from abroad; I do not have any figures for these. The government, county councils also securitised their rental income for houses etc. We went completely mad, and were such an easy target for the International Financial Buccaneers, who worked on a percentage of fees basis; they did not care whether the stuff they were acting as middlemen was rubbish.

Yes, our slow burner is Retail and Commercial Mortgages; some of which are already reaching our courts. According to laws passed before the guarantee was given, the government put repayments of any bad loans that were in Asset Backed Securities before payments of taxes owned, staff salaries etc. Yes, we are truly cooked. Our seemingly non principled based, compromised politicians’ right up to the very end are muddled at whose advice they should listen to. There is further bad debts of €80Bn coming down the line, to be added to the cost of Bank bail-outs. Future budgets are going to hasten this. But what the hell! We the electorate, bankers, professionals, politicians etc have been closing our eyes and ears to recognising reality for twenty years. It is now judgement time and let's pray; absolution time!!!!!! Hopefully, we will have people with a bit of knowledge and backbone, pleading our case to the international community Irish Press Releases » Call for Bank Enquiry into Asset Backed Securities still active since May 2007
 

Gemlarkin

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Probably closer to €150 billion

I always said €100 Billion including NAMA and opportunity cost.

Even if the insolvent banks could lend, people and businesses are too saturated with debt to borrow any more. Its simply mathematically impossible to service between 500% and 1000% of your income. The only debt free people are the shrewdies who will definitely never borrow now, Pensioners or young cubs.

Its the same in the States, Bernanke doesn't get it. He can go through QE3, QE4 to infinity, but people and firms simply do not want to borrow. So all he is doing is creating hyperinflation.
Probably closer to €150 billion

Who says the banks won't lose more money. How many tens of thousands of buy to regret mortgages will be abandoned by the former bulls?

As interest rates rise and as the banks screw the variable rate mortgageholoders more and more investors will see that walking away and declaring bankruptcy will offer a quicker path to solvency than sticking with their investments.

Soon they will be looking for a NAMA 2 to buy up the investment properties.

We are standing guarantor for NAMA and itdoes impact on our credit worthiness.

Lets not forget the banks are losing on the residential trackers which account for 50% of their 140 billion residential loan book.

Many borrowers from the tranche of 250 billion commercial mortgages also are on tracker mortgages. The load is not evenly shared ( nor should it be) many backs can only break.

The banks made foolish bargains and we are tied to their fate. 60 billion + NAMA has been poured down the drain. Ultimately if the banks cannot be saved this money is gone
 

Squire Allworthy

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If people cannot afford to borrow and Banks cannot afford to lend, what is the point in throwing over 60 billion at these institutions.
It should never have been the role of the State to save the Banks. I would take the view that in the Eurozone the responsibility for the liquidity and regulation of such should lie with the ECB. The banks across Europe are that interlinked that to claim one is German and another French or Spanish seems to me to be pointless.

I always said €100 Billion including NAMA and opportunity cost.

Even if the insolvent banks could lend, people and businesses are too saturated with debt to borrow any more. Its simply mathematically impossible to service between 500% and 1000% of your income. The only debt free people are the shrewdies who will definitely never borrow now, Pensioners or young cubs.

Its the same in the States, Bernanke doesn't get it. He can go through QE3, QE4 to infinity, but people and firms simply do not want to borrow. So all he is doing is creating hyperinflation.
Not everyone lost in the bubble. There is plenty of money washing around looking for a sound home. If there is value people will purchase. In Ireland, if there had been no intervention, no NAMA, bottom would have been reached some time ago and people would have re-entered the market. The country would by now be thinking of recovery.

Regarding Bernanke and QE 2 I don't think we are at the stage of hyper inflation just yet. Certainly in the medium term we must be looking at inflation of say around 5%. Some say 3% but I would put it higher. I think that they aim to increase inflation as a matter of policy. 1 trillion with 5% inflation is worth a lot less by the end of the year. Of course the risk is they destroy confidence in the currency in the process.
 

hammer

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Not everyone lost in the bubble. There is plenty of money washing around looking for a sound home. If there is value people will purchase. In Ireland, if there had been no intervention, no NAMA, bottom would have been reached some time ago and people would have re-entered the market. The country would by now be thinking of recovery.
Yes they did. Everyone.

BTW what effect on the property market do you think a property tax will have. Stamp duty is stil lthere remember also.

It took the UK market about 10 years to recover and you think 1,000 people buying property will save us :(

Its over.
 

WTTR

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Well I presume so

Further to my submission above. I have no finer backer for my stance than the Governor of the Bank of England, two years after an inquiry was called for in Ireland.
Mr King said it would take "many months" to establish the scale of toxic assets held by banks, and the scale of problems would change depending on the international economic outlook.

Giving evidence to the Treasury Select Committee, Mr King said it was vital to "find out what is really on the balance sheets of our major banks".

"That is not something that is easy to do or can be done quickly," he told the MPs. "It will require a much longer and more detailed assessment contract by contract."

He went on: "It will certainly take many months in my view."

Mr King said the state of the global economy would have a huge impact on the situation of struggling UK financial institutions.

"How much capital banks will need in the end is impossible to tell," he added.

Mr King dismissed as "wild exaggeration" any suggestion that the country would have to be taken into administration because of the level of liabilities it had taken on from the banks. Mervyn King: 'Impossible to say' how much capital needed to shore up banking system - Telegraph
I guess the Irish Authorities will three and a half years after the initial public call for an inquiry into the health of the Irish banking system was made be finally getting around to doing this National Emergency Enquiry into Banking called for!

Well I presume so :rolleyes: now that the whole world is pointing to the Irish Banks "Dragons be here"
 
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He3

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€80 million spent on student grants each year - 'so there has to be cuts' - TV3 Nightly News reporter
 

GDPR

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It takes exceptional talent to run up losses of this magnitude.

To do so and remain in office requires spectacular ability.

Or it tells me all I need to know about the Irish political system and the senior civil service. Are concepts like accountability and accepting responsibility alien in the land of Ireland?

The Minister of Finance should accept responsibility and resign as should his predecessor. Those advising need to be purged by whoever follows.
Spoken like a man who has a sound alternative to offer, including covering all deposits. Do tell.
And I allow 20/20 hindsight.
 

Dreaded_Estate

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Spoken like a man who has a sound alternative to offer, including covering all deposits. Do tell.
And I allow 20/20 hindsight.
Exclude existing senior bonds and subordinated bonds from the guarantee and impose losses on those investors.

We would still have faced a sizable bill but nothing like the current €50bn+
 
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