More money, banking sector? Why yes, that’ll do nicely thanks. March 31, 2011Posted by WorldbyStorm in Economy, Irish Politics.
With the news that is in it this afternoon it’s no harm to look at this fairly good overview of the banking crisis in the Guardian, not least in a chart which tots up just how much the financial sector has siphoned away in bailouts since 2008.
Ireland’s banks will, by the end of Thursday, have required five bailouts since 20 September 2008:
• 2008: €400bn guarantee scheme covering the six main banks • 2009: €11bn injected into banks including Anglo • Pre October 2010: €21.8bn into main banks • Post October 2010: €13.3bn into main banks • April 2011?: €18bn to €23bn in new bailout
The total sum (excepting the guarantee scheme) is now approximately €70bn.
One reads that:
There were reports on RTE on Wednesday night that Bank of Ireland could need a bailout of as much as €5bn which will tip the bank, which was founded in 1783, into state control.
This will come as a shock to the Irish public and be seen as an even greater watershed than the bailout of the toxic Anglo-Irish Bank whose reckless lending to developers brought the country to its knees and led to last year’s IMF-EU €85bn (£75bn) bailout.
A shock? No, not at this stage. Merely resigned to the reality of an economic and political class who have refused to make truly ‘difficult’ decisions that would ameliorate the effects of this crisis on ordinary citizens – not that that same economic and political class would dream of telling where private entities to get off.
What’s irritating is that some aren’t unaware of this, even from within the broad sector that those private entities exist within.:
Andrew Bosomworth, one of the [Pimco's] fund’s European strategists, told Bloomberg that bondholders needed to face “bail in” arrangements in the Irish banks, code for forcing some losses on these investors. “I am reasonably concerned,” he said.
He said the line that senior bondholders could not be touched had not worked. “This is fuel for moral hazard,” he said. “Look, Ireland is closing kindergartens to pay senior bondholders – ethically that is a very questionable policy.
It surely is.