David McWilliams to give evidence at the Banking Inquiry - time changes

My opinion ... he should copy the Swedish banking policy of 1992. This would stop the bank run that was happening in Ireland at the time.- DMcW

-> The rest was up to Lenihan's civil servants, central bankers and personal economic advisors to determine scope, timing, limits, etc.
-> They did not follow the Swedish 1992 model.

This is such a great example of how he rewrites history.

This is what he said in the Sunday Business Post on September 28th 2008

State guarantees can avert depression


Therefore, it is crucial that the government take the right decision now. Events of the past few days imply that there is no model we can import from anywhere else to help us. The rest of the world is suffering the same plight. Large banks are going under by the day. Thus, if we wait, we will simply suffer more.


We need to come up with an Irish solution to our specific problem – because no one has the antidote to the contagion that is spreading through the global financial markets.
 
My opinion (opinion, not advice — advice is given by paid advisors, civil servants, paid consultants, paid central bankers etc) he should copy the Swedish banking policy of 1992. This would stop the bank run that was happening in Ireland at the time.- DMcW
Click to expand...
A good opening which should have continued "don't blame lil' ol' me if my opinion was wrong, blame his paid advisors", and that would be fair comment. Instead he incredibly finds himself now arguing that his opinion was absolutely correct, it was just that Lenihan didn't follow it. No wonder the Chairman asked him "did you ever make a mistake". That is a very meaningful finale and I guess McWilliams has carried that with him since as his lasting impression of how he fared before the committee.

Back to topic, Ireland did follow the Swedish model and did stop the banking run. About the only difference was in the treatment of subbies and the amount of subbies which matured in those two years and were therefore guaranteed was negligible. McWilliams would have a more credible task if he defended his decision.

The Swedish guarantee ended up costing the Swedish state nothing, mostly because its NAMA made big gains on the upswing. Watch this space.

There was one crucial difference with the Swedish guarantee though. The state was more or less guaranteeing liabilities in its own currency, which if the worst were to transpire it could at least ostensibly honour by printing krone.

Lenihan, in guaranteeing 450bn of euro, sterling, dollar etc. liabilities was in one sense making an enormous bluff.
 
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