And the next time there's a crisis?
We tried that approach - the truth is it didn't work.
To be fair, my understanding is that if you take what's still in the Pension Reserve Fund, the ISIF, and the market value of the State's holding in the banks, the total is greater than what was originally in the Pension Reserve Fund.
Really? That surprises me - I'd love to see some figures.
There is a pretty compelling argument against investing in risk assets while carrying significant amounts of debt. That's really what we would be doing by reconstituting the NPRF.
It was stated by a senior NTMA person at something I attended recently.
Re borrowing to invest, I agree in general, but not when you can raise debt at close to zero percent.
The problem is you don't know what price you will be paying to roll over the debt during your investment horizon.
The consultation process will consider a number of options, and Mr Varadkar said he was anxious to build a consensus approach.
However, he noted that introducing a new universal scheme could take ten years.
To be fair, my understanding is that if you take what's still in the Pension Reserve Fund, the ISIF, and the market value of the State's holding in the banks, the total is greater than what was originally in the Pension Reserve Fund.
Hi Gordan
I had a bit of a dig to see if I could put some rough figures around this as a matter of curiosity.
Rounding to the nearest billion, ISIF has a current value of €8bn and the State's shareholdings in BOI and PTSB have a combined value of €2bn. Valuing the State's shareholding in AIB is a bit more subjective but the most recent estimates seem to be around €9bn. So that's €19bn in total.
At the end of 2008, the NPRF had a total value of just over €16bn so it does indeed seem likely that the combined value today of ISIF and the State's shareholdings in the banks exceeds the value of the NPRF at the time of the bailouts.
However, if the bailout hadn't happened and the NPRF remained invested as per its asset allocation at the end of 2008, without any further contributions from the State, then by my calculations the NPRF would have total value today of around €22bn.
Depends how you measure things I suppose!
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