Summary of terms, from RTE
Government to appoint 1 in 4 directors.
Banks to receive 3.5 billion each.
Banks will pay interest rate of 8%.
There will be 30% increase in mortgages to First Time Buyers.
10% increase in loans to SMEs.
Hold off home repossessions for 12 months.
33% reduction in senior executive pay.
Salaries to be frozen.
No performance bonuses this year.
Non-exec directors fees cut by 25%
Reactions?
Where's the provios that borrowers can only borrow 80% of the mortgage with repayments capped at a % of their salary? Did we not learn anything from this housing bubble?There will be 30% increase in mortgages to First Time Buyers.
Government to appoint 1 in 4 directors. What good will this do? One of the main issues with the banks at the minute is transparency or rather the lack of it. Having a govt appointed director should at least make it more apparent to the Govt as to what is going on in each bank. It needs however to be accompanied by a serious overhall of the regualtory bodies as well (in my view)
Banks to receive 3.5 billion each. When and how? My understanding is that it will come from the pension reserve fund
Banks will pay interest rate of 8%. When and How is this paid? Govt is in effect taking preference shares in the bank and the sum will be paid as a dividend, in effect, the exchequer should get €560m pa from both banks until they buy back the preference shares
There will be 30% increase in mortgages to First Time Buyers. Are there any? If Not how can this be enforced? I believe they are looking to increase the overall sum available to FTBs and not just the amount an individual can borrow
10% increase in loans to SMEs.
Hold off home repossessions for 12 months.
33% reduction in senior executive pay. Good Start
Salaries to be frozen. All or just senior?
No performance bonuses this year. Or until we the public have been paid back in full. They should be traeted as public servants now no bonuses.
Non-exec directors fees cut by 25% Good Start
These are genuine questions if anyone has anserws or links to answers
There's nothing technically difficult to negotiate in the above. How could it take so long??
I would have liked to see more lending to businesses (10%), especially innovative start-ups and indigenous SMEs, and no increase in lending to FTB's (30%).
Its enterprise that needs our money and not houses. Mortgage lending is fine as it is, thanks very much.
“A dwelling-house, as such, contributes nothing to the revenue of its inhabitant” Adams, Wealth of Nations
Is it a coincidence that BOI have issued a statement this morning that they will have to write of €6 billion (twice as much as previously stated), the morning after the bailout was approved?
Why negotiate in the first place?, why not do what they did in the UK?, call the banks in, tell them they are doing it, end of story.
Where's the provios that borrowers can only borrow 80% of the mortgage with repayments capped at a % of their salary? Did we not learn anything from this housing bubble?
I know it would of been nice to see the banks get some rough love from our Taoiseach . . .
With the mortgage rate around 5% and the banks paying 8% interest to the government for the bailout money - how will they not become bankrupt very quickly?
looks like these banks are the only ones who arnt at risk from losing their jobs.
A pay freeze is hardly penal.
My guess is that the shareholders would have no option but to accept and would have no problem wielding the axe to their managements in order to stay in business.
If the shareholders don't fire their whole board after what has happened to their investment then they deserve those incompetents.It is down to the ordinary shareholder now to voice their disapproval of the directors....and then lose the vote because the institutions will return them anyway.
Ulster Bank(which I accept is not covered under this) is axing 10% of it's staff. It's parent group, the RBS in the UK is laying off over 2000 in what if the rumours are correct, is the first of many
NIB(again not covered under this) have said they are reviewing their branch structure
Irish independent reported at the end of jan that BOI were looking to lay off 1200 staff
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