Why not forget NAMA and leave the banks to market forces?

[Panopticon]

Can you elaborate on why this is a bad thing?

I'm sure that if foreign banks came in to set up in ireland or take over the branch networks of AIB and BoI, they would keep a reasonable percentage of the bank employees

People need banks. They might lose faith in AIB/BoI and the rest but what would stop them doing business with Barclays, HSBC, Rabobank, etc.?

Why do our banks have to be Irish? We are Europeans after all.

- I don't think it would be a bad thing because I don't think it matters much, but then again I hate nationalism and most Irish people are obsessed with it
- Yes but any sensible foreign bank would reduce staff numbers if they took over AIB/BOI; keeping them under government control, both directly through our stake in the banks and indirectly through pressure on Irish management, allows the government to reduce the scale of redundancies
- Takeovers are a lot less serious than bank failures; that's what I was talking about. I think takeovers would represent minor systemic changes, if any at all. I agree that we are Europeans, but most people in this country define themselves in terms of ethnic Irish nationalism.

No it isn't.

Actually, you've just convinced me that you're right.

[bormotello]

1. There is a high likelihood of bank insolvency without government intervention, and that would require us to guarantee lots of deposits or effectively declare bankruptcy as a state.

In March banks had enough good assets to cover deposits. Of coarse, they started to sell them now to pay bondholders first, but few months ago collapse of banks wouldn’t touch deposits.

2. We should be sceptical of too much state intervention in banks; NAMA is the only alternative to having to eventually nationalise everything.

Controlled collapse of banks without affecting ordinary people is only alternative

3. AIB/BOI would probably be taken over; having the entire Irish banking sector headquartered outside the state is a bad thing.

Why?
It will break links between business elite(developers) and political establishment.

4. Banks provide a lot of employment. This is in part a means of avoiding or reducing the size of mass redundancies.

NAMA will be biggest source of unemployment. All FDI are about 170 Bn. Imagine how many jobs could be created if 54 Bn would be directly injected into Irish economy

5. Major systemic changes to the banking sector would scare investors and citizens away from participating in exchange, especially if one of them goes insolvent/bankrupt. That would be very bad for the economy and it would make monetary policy entirely unpredictable.

Investors already scared of incompetence of Irish banking sector, which put their into serious risk. Main toxic asset is management of Irish banks