Banks recapitalised but chasing debts

[Shuttleworth]

Forgive me if this question has been addressed already, but I think I have a very valid point. I'm talking in cold, hard legal terms here, rather than a general "this is Ireland" standpoint.

If Bank of Ireland, AIB and Anglo have been recapitalised by the Minister for Finance, AND the taxpayer/social welfare recipient has had his/her salary or benefits garnished to pay for the recapitalisation of the banks and the interest payable on the EU/IMF drawdown, it would seem to me that anyone who is attempting to pay back money that was borrowed such as car loan, credit card, etc. to a bank that has been recapitalised is effectively enriching the bank twice?? I'm not saying that the borrower doesn't owe the money, but I am questioning who should that money be paid to.

Surely before anyone post-Budget pays another red cent in loans, they should obtain a statement from the Financial Regulator who oversaw the recapitalisation process as to whether or not such banks presented certain debts as being "bad" to the Minister for Finance and demanded financial coverage for them.

There's going to be massive defaults on personal and mortgage debt over the next twelve months - people are simply not going to be able to pay back what they've borrowed, as in my view their wage/benefit garnishment constitutes an Instalment Order by statute. I appreciate that many people who owe nothing are going to be paying for the debts of others, but that's a side issue. For both bank and borrower it will be a bumpy ride.

Thoughts?

 

[Jim2007]

If Bank of Ireland, AIB and Anglo have been recapitalised by the Minister for Finance, AND the taxpayer/social welfare recipient has had his/her salary or benefits garnished to pay for the recapitalisation of the banks and the interest payable on the EU/IMF drawdown, it would seem to me that anyone who is attempting to pay back money that was borrowed such as car loan, credit card, etc. to a bank that has been recapitalised is effectively enriching the bank twice?? I'm not saying that the borrower doesn't owe the money, but I am questioning who should that money be paid to.

The more cash the banks can collect the less they will have to draw down from the bailout funds and hence the less the taxpayers will have to pay back in the end. It seems only proper order then that the banks should chase down every euro they can lay their hands on, in my view.

Jim.

 

[Brendan Burgess]

When people say "We bailed out the banks" what do they mean?

We bailed out the depositors/senior bondholders in the banks.

We didn't bail out the shareholders - they have lost nearly everything.
We didn't bail out the property developers.

The people who benefited most were the depositors.

It's a tough one. It was felt that we had to bail out the depositors. Because we did this, we simply don't have the money to bail out the borrowers other than the money we spend on Mortgage Interest Supplement.

Brendan