8bn for the banks

C

cisco

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The banks are going to get 8bn
I cant help thinking this money would be better off being spent on
building schools and the like to keep people working.
Even helping employers to keep staff, until we get over this.
 
You are right and wrong Cisco, i would love to spend the €8b on capital projects, like roads, schools and other buildings. I am also completly outraged that Mr Cowen cut capital spending by €300m. With projects cheaper to complete they should be aiming to get more done.
But the banks really need this recapitalisation. Look at the panic that was caused when "northern rock" got into trouble, everybody withdrawing all their savings etc. With this injection of funds to the banks, they will be better able to release funds to people who need it, ie people looking to buy homes etc. Maybe with independent people sitting on their boards(providing the re-capitalisation takes place) they might be more responcable about who they lend to and for what.
 
One of the main ways this downturn is going to be overcome, is to literally refinance the banks. I do not believe that the Government really wants to do this, but has to to maintain the country, the businesses, the Banks and to keep the country itself afloat. I agree with the OP, it could be better spent, but the lies that the Bank's told us all up to recently are unbelievable. Every single member of the senior Management of the Irish Banks should be given a P45. If this happens, the public would then know that the Government are now in charge and we can all look forward.
 
Maybe the government should have allowed all the banks to collapse. Yes, there would probably have been riots as companies collapsed and people lost their savings.

However, it would have been over within a year. New banks would be created and people could start again.
We also wouldn't have wasted billions. As is it, companies are collapsing anyway, and people are losing pensions.
 
let all the banks collapse? what a silly comment. do you have any idea of the consquences of that are
 
leghorn said:
We also wouldn't have wasted billions.
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Problem is this country would have ended up like Iceland ---but worse. Every other European country has had to feed their country's Banks with money. The Bank's created the problem and all and sundry are been asked and told to listen to their spoof and lies and the persons telling us all this, the SM of same are carrying on regardless. An Taoiseach, cut their wages now before the lunatics really start running the asylum.
 
And before others write that they are private companies, make it a precondition before a cent is handed over.
 
let all the banks collapse? what a silly comment. do you have any idea of the consquences of that are
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It happened during the great depression. Thousands of banks collapsed.

So what would be the consequences?
- Companies would collapse.
- People would lose their savings.

How is this different to what's happening now? People are losing pensions, and companies are collapsing. It's just more drawn out and billions are being wasted in futile attempts to stop it. The banks may still collapse anyway! This money could have been used for Ireland's reconstruction.

Sometimes it's better to just bite the bullet.
 
Leghorn, I think you are only saying what most of the people in Ireland are thinking. None of us want these guys bailed out, but the unfortunate fact of the matter is that it is the lessor of two evils (at least thats what most leaders of most countries appear to believe).

Under capitalist ideals, they should of been let go to the wall. But how would our country do business with each other? How would we do business outside of Ireland? How would we exchange money, people going down to the ATMs with no money coming out . .

These are just basic questions to something that would provide far more dynamic problems along the way, in truth they didnt even scratch the surface.

Personally I think when we do eventually get things back on track (which will take years) the government should move towards cordoning off the importance banks play in modern society. Perhaps some sort of central public banking system in each country should be considered so that we could in fact let banks collapse if they make the same mistakes again.
 
cisco said:
The banks are going to get 8bn
I cant help thinking this money would be better off being spent on
building schools and the like to keep people working.
Even helping employers to keep staff, until we get over this.
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The bank are getting €8bn now. I for one believe that this will not be enough. We have somewhere around €360bn of property debt out there. We will probably face loan losses in excess of the UK property crash of the early 1990s so if you are a taxpayer, you had better keep your cheque book handy.
 
We mightn't have any choice but to let the banks collapse.
What do we do when the cupboard is bare, and there's not enough money to prop them up any more?
 
Under capitalist ideals, they should of been let go to the wall. But how would our country do business with each other? How would we do business outside of Ireland? How would we exchange money, people going down to the ATMs with no money coming out . .
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All it takes is for a couple of banks to survive for business to be able to continue, so what would the difficulty be with letting the 4 worst of the 6 majors go under? I dont see why all the banks need to be saved?
 
On the 8bn

You could employ 200,000 people for a year on this money or 100,000 for 2 years.

Would the collapse of most of our banks result result in 200,000 more people on the dole? Thats the big question - this needs to be answered before we know if it is the correct course of action.

Remember that a lot more people will be on the dole anyway due to the global downturn - so saying that the unemployment claimants will rise by 200k is not sufficient to answer the question. It has to be 200k MORE people than as a result of the global downturn.

I'm not convinced that the loss of most of our banks would put 200k extra people on the dole, so I'm not convinced that this will work.

To be honest, the approach being taken is akin to giving a drug addict a handout to buy more drugs rather than putting him thru cold turkey to get him off the drugs. May be ok in the short term, but will ultimately end in disaster.
 
csirl said:
On the 8bn

You could employ 200,000 people for a year on this money or 100,000 for 2 years.

Would the collapse of most of our banks result result in 200,000 more people on the dole? Thats the big question - this needs to be answered before we know if it is the correct course of action.

Remember that a lot more people will be on the dole anyway due to the global downturn - so saying that the unemployment claimants will rise by 200k is not sufficient to answer the question. It has to be 200k MORE people than as a result of the global downturn.

I'm not convinced that the loss of most of our banks would put 200k extra people on the dole, so I'm not convinced that this will work.

To be honest, the approach being taken is akin to giving a drug addict a handout to buy more drugs rather than putting him thru cold turkey to get him off the drugs. May be ok in the short term, but will ultimately end in disaster.
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So are you suggesting that we let the markets decide, ie. let the banks fail. Have you seen whats happening in Iceland? At least they would have their fishing grounds!

Its against the grain I know, but as a poster said earlier its the lesser of 2 evils.
 
Csirl, think about it in a broader term, how many people are employed by the banks ? How many businesses depend on the banks ? How many businesses would shut down right away if banks went bust in the morning ?! Imagine the public perception if all the major banks went bust along with peoples savings and the government did nothing ? They would be a civil rising !!
 
Holtend82 said:
Csirl, think about it in a broader term, how many people are employed by the banks ? How many businesses depend on the banks ? How many businesses would shut down right away if banks went bust in the morning ?! Imagine the public perception if all the major banks went bust along with peoples savings and the government did nothing ? They would be a civil rising !!
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They dont employ 200k people.

The banks arent lending money anytime soon - any bailout money will be used to cover existing liabilities - so letting them go bust isnt going to hurt businesses who require loans. All it takes is for 1 or 2 banks to survive for business to continue.....and these dont have to be Irish banks.

Peoples savings are guaranteed, so that argument is a red herring.

Yes, it will be inconvenient for people having to switch banks and maybe having to travel further to get to the nearest branch, but its not the end of the world. People will survive.

Why havent we learned from other people mistakes? The UK bailed out their banks and are back to square one - made absolutely no difference except for postponing the inevitable.
 
As an alternative, why doesnt the Government start a new bank with the €8bn?

Could you imagine the competitive advantage this bank would have over all others in the EU?

No toxic loans, no subprime mortgages................

It would attract depositors from all over the world !!!
 
"The banks arent lending money anytime soon - "

From my anecdotal observations I think the banks are lending for both mortgages and to small businesses. I think the whinging from the likes of ISME is because that is what they do. No matter how good things were they always had a gripe so I tend not to pay too much attention anymore.
 
I dont see why the fat cat directors of Irish banks should not be made to hand back their earnings (especially bonuses) for the last 5 yrs or so. They failed in their fiduciary responsibility to shareholders (and everyone else).
 
lemur said:
I dont see why the fat cat directors of Irish banks should not be made to hand back their earnings (especially bonuses) for the last 5 yrs or so. They failed in their fiduciary responsibility to shareholders (and everyone else).
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They were re-elected to the board every year by those same shareholders
 
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