At this point in time Irish banks have some of the best T1 ratios in Europe and when you combine that with the fact that they have little exposure to Greek/Spanish/Italian sovereign debt, it is kind of hard to see why you'd consider them to be more risky than a bank with a lower T1 ratio and exposure to this sovereign debt!
As I understand it, from legal point of view the best the Irish government could do is introduce a new currency - for as long as the Euro continues to exist they would have no authority to convert Irish deposits held in Euros. Only the people of Europe can do that with a treaty change, which in Ireland's case would require a referendum!
All in all I would think his strategy is as good as anyone else's ideas.
Agreed. I posted what Alan said in an attempt to to balance what I see as hysteria. The assumption on this site and others seems to be that anyone with money in Irish banks/Ireland is a fool. Stirred up by the likes of Eddie Hobbs and Jill Kerby (who I hear was on liveline yesterday preaching her doom and gloom yet again)
I have all my money in (several) Irish banks, Ulster Bank and State Savings and I'm pretty happy with how things are going so far. Because of interest rates offered by these banks I'm better off than I would be had I opened an account in Belgium (remember all the buzz about Keytrade?) or Germany.
CiaranT said:
Well said, Brendan. Alan clearly has not attended diversification 101 classes.
Fairly patronising comment Ciaran. Maybe Alan hasn't read "how to be a good little sheep" either. While diversification seems like a good strategy, diversification into what?
And to protect against what exactly - inflation, hyperinflation, deflation?
If the doomsday scenario that many are predicting happens do you really think that a normal person having a bank account in Germany or the UK is going to do them much good.
One problem I have with much of the diversification advice from the likes of Hobbs and Kerby is that it is dramatic yet also wishy washy. They'll make a big fuss about a certain country, currency or asset class. Their readers immediately get excited/frightened. Then they recommend putting no more than 10% of one's wealth into it. And they'll have a disclaimer about how nobody knows what will happen and to seek professional advice. Or a good one I heard from Jill recently "people who know more than I do have recommended" x or y. Nice way of absolving herself of any responsibility.
Contrast that with an economist who comes straight out on national radio and says "I have my money in Irish banks...all of it".