Irish Economy: cost of our banking crisis is only a little more than normal

[cyberianpan]

So far there's nothing that special about the amount our banking crisis is costing.

The Irish Economy Blog Archive The Fiscal Cost of the Irish Banking Crisis in Comparative Perspective

By Philip Lane
Paper No. 262 (published in National Institute Economic Review)], Patrick Honohan estimated that the mean fiscal cost of systemic banking crises to be 17.1% of GDP [narrow sample of 45 countries] or 19.1% of GDP [broader sample of 78 countries]
...

€33 billion is about 22 percent of GDP (26 percent approx of GNP). The injections into AIB and Bank of Ireland could ultimately deliver some level of payoff to the taxpayer, such that final cost could approach the mean value for a systemic banking crisis. In the other direction, additional fiscal injections in the future would raise the total bailout cost.

Is it time for some perspective ?



cYp

[yoganmahew]

A couple of caveats -
- the usual about using GDP; if we use the 26% GNP figure, then we are 50% above the narrow sample.
- we're not there yet; NAMA is going to spread the costs as will the promissory notes, even aside from any additional recapitalisation required.

[droghedasouth]

cYp

A little bit selective with the quotations.

"The respective median values are 13.2% and 15.5% and the upper quartile values are 16.7% and 27.7%."

So we are well into the upper quartile for the narrow sample and about upper quartile for the broader sample.

[He3]

cYp

A little bit selective with the quotations.

"The respective median values are 13.2% and 15.5% and the upper quartile values are 16.7% and 27.7%."

So we are well into the upper quartile for the narrow sample and about upper quartile for the broader sample.

...already...

[cyberianpan]

cYp

A little bit selective with the quotations.

"The respective median values are 13.2% and 15.5% and the upper quartile values are 16.7% and 27.7%."

So we are well into the upper quartile for the narrow sample and about upper quartile for the broader sample.

For the broader sample

3rd quartile = [15.5% <-> 27.7% ]
4th quartile = 27.7%+

22% is in fact about middle of the 3rd quartile (though we might median point of same to be say 20.5%) and positive returns can be expected from BOI & AIB to reduce this

The point I'm making is that we are far from being in a unique situation - and not that much above the norm.

cYp

[Panopticon]

There is no good reason to use GNP over GDP here though, because loans presumably go to foreign activity as well as Irish-owned.

[cHeal]

...already...

Already.

Regardless of how "normal" our bail out is, it would be a hell of a lot less if Anglo wasn't guaranteed, and was allowed fail. That didn't happen because of Cowen, it didn't happen because of the corrupt relationship between our government and the banks.

[charley]

For the broader sample

3rd quartile = [15.5% <-> 27.7% ]
4th quartile = 27.7%+

22% is in fact about middle of the 3rd quartile (though we might median point of same to be say 20.5%) and positive returns can be expected from BOI & AIB to reduce this

The point I'm making is that we are far from being in a unique situation - and not that much above the norm.

cYp

will AIB not be nationalised very soon ?

[cyberianpan]

will AIB not be nationalised very soon ?

Something like that... but some of our money will be recovered from AIB

cYp

[ibis]

For the broader sample

3rd quartile = [15.5% <-> 27.7% ]
4th quartile = 27.7%+

22% is in fact about middle of the 3rd quartile (though we might median point of same to be say 20.5%) and positive returns can be expected from BOI & AIB to reduce this

The point I'm making is that we are far from being in a unique situation - and not that much above the norm.

cYp

You'll be telling me next our bubble wasn't unique, and then I'll really be upset.