ESRI says the possibility of a banking collapse needs to be recognized
- Thread starter RSMike
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acannydoitji
Registered User
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Would those who know about such things care to list those banks/deposit takers operating in Ireland in order of financial strength/potential risk.
ie If AIB are no.1 then where would Anglo Irish, INBS, PTSB et al be?
ie If AIB are no.1 then where would Anglo Irish, INBS, PTSB et al be?
but its a bit alarming to hear the ESRI coming out with it.
Why is it alarming - the ESRI always comes out with warnings - of all institutions (bar alarmist media), i'd expect this from the ESRI first. Its there job to identify risks to the economy and highlight it. They are'nt saying anything is going to go wrong - just warning of the potential.
On some plastic bags there is a message "keep away from children, risk of suffocation" - eek! Im scared!... no of course im not, all the manufacturer is doing is warning about the potential risk so as to avoid an actual accident.
Dave Vanian
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Fair enough - you take heed of the warning and proactively keep your plastic bags away from your ankle biters.
So what should we be doing to take heed of the ESRI's warning to avoid the potential dangers here?
Stick to the safety advice we already have... don't lend money too easily, ensure a healthy split of wholesale and deposit funding in the case of banks, avoid overtly risky loans to those with likelyhood of deflault, keep an eye on the practices of irish based banks, hedge funds and the like, examine the shortcomings of the regulatory framework currently in place and implement improvements....
In short keep doing the things we have been doing/should have been doing.
In short keep doing the things we have been doing/should have been doing.
B
bungaloid
Guest
There is something pathetic about ESRI warning about the banking system at this late stage. After NR and US meltdown it is clear to anyone and everyone that systemic risks have increased dramatically, even in supereconomy Ireland. It is a bit like forest service warning about risk of fires when the hills are already burning.
ESRI are merely covering their backsides. They don't want to be accused of oversight in the event of a banking failure here. But they did not issue such warnings when they might have made a difference.
ESRI are merely covering their backsides. They don't want to be accused of oversight in the event of a banking failure here. But they did not issue such warnings when they might have made a difference.
I
irishlinks
Guest
Where exactly did the ESRI say "the possibility of a banking collapse needs to be recognized" ?
I have had a look at the "executive summary" of this report and I think it's just some more panic inducing words from the media.
The ESRI report says
Apart from the decline in house-building, the other major issue overshadowing this Commentary is turbulence in financial markets. The impacts of the fall-out from difficulties in the US sub-prime lending market are being felt at the time of writing, with great uncertainty over who is the ultimate bearer of the risk associated with the sub-prime loans. While this uncertainty persists, a credit squeeze is in operation. This credit squeeze has led to central banks providing additional liquidity in the money markets, to the cutting of interest rates in the US and to particular difficulties for the UK bank, Northern Rock. Although we are conscious of these financial uncertainties, we do not factor them into our forecasts precisely because of their unknown impacts and duration."
This is hardly them saying that a "banking collapse cannot be ruled out" .
Is it?
I have had a look at the "executive summary" of this report and I think it's just some more panic inducing words from the media.
The ESRI report says
Apart from the decline in house-building, the other major issue overshadowing this Commentary is turbulence in financial markets. The impacts of the fall-out from difficulties in the US sub-prime lending market are being felt at the time of writing, with great uncertainty over who is the ultimate bearer of the risk associated with the sub-prime loans. While this uncertainty persists, a credit squeeze is in operation. This credit squeeze has led to central banks providing additional liquidity in the money markets, to the cutting of interest rates in the US and to particular difficulties for the UK bank, Northern Rock. Although we are conscious of these financial uncertainties, we do not factor them into our forecasts precisely because of their unknown impacts and duration."
This is hardly them saying that a "banking collapse cannot be ruled out" .
Is it?
You'll have to look at more than the executive summary to see what exactly the ESRI say about the Irish banks (unfortunately I think you have to pay for the privilege). RTE have summarized it in their reporting of the release but I don't think they took a direct quote from the ESRI report regarding this matter.