Any creative solutions to banking crisis?

[The Emperor of Absurdia]

Patslatt raises an interesting point - c'mon P.ie'rs debate it rather than mucking about. We know some Pol's moniter this site so lets put up some alternatives to raiding the National Pension Fund.

I like the idea of public subscription to a rights issue. But it needs to be big and fast. In the absence of transparency we could try this :

There are 33,000 millionaires in Ireland (could be one or two less with the crash). Apply a wealth tax of say 3% on all wealth over €1m (Yield €3-5Bn?). Not payable is you invest in gov backed rights issue in 2 selected banks (cheerio builders bank and BS). No CGT after 5 years. Initial stake 80% guaranteed.

At todays prices any bank that is standing after 5 years will return a major windfall. Note - prices are down 80%+ at this stage - I'd further dilute by another 60%ish for rights issue. That has got to be worth a punt. Think about it - credit crunch is abating (a bit) and recession can be managed (if a bit yucky). If we are still in financial poo after 5 years we still have the pension fund and we may be able to call on external investment (ie Sovereign funds will have mopped up previous 5 years and now have time for some minnow action). I'd take a bit of that.

Oh - and a regulator with really nasty teeth

[gulliblepleb]

The notion of the State buying dead ducks and their losses is not a good idea.

Start a new bank and hire the best of the dead duck staff for a fraction of what they are currently paid.

Yes the State still bail out depositors. The State could seek subscriptions for share capital and defray much of the cost that way.

Nursing the shareholdings of dead duck shareholders back to health is not in the best interest of taxpayers subscribing public funds.

Eliminate the dealing cost for investing in property. Nail 20% CGT on the sale of the principal residence.

Why were banks allowed to lend with out indemnity bonds on high loan to value mortgages? Where was the regulation

[southwestkerry]

The only thing I can think off is to buy as many shares as possible and start loading cash in to the vaults.

[snacksandfizzydrinks]

Patslatt! - Are you Mr. Sheehy, Mr. Goggins or Mr. Drumm signing in under a pseudonym?

Are you seriously asking the taxpayer to guarantee a rights issue by private banks?

Let me explain whats going to happen:

The property slump (which has yet to come btw) will wipe out most if not all the banks
The banks will be nationalised
The shareholders will be wiped out

In my opinion, the banks should not be saved, there are alternatives for conducting business - the post office system could have a computer system rollout and could handle swift/iban transfers

Only deposits in banks should be guaranteed by the government, the guarantee as signed (loans) is financial ruin for our grandchildren

October 2008

why cant the Dep of Finance have this vision/acceptance of truth?