7 billion bail out for banks - The Times

[markeys]

Irish banks to receive 7 Billion bailout from Government...

Bank of Ireland and Allied Irish Bank, the country’s two largest banks, will get €2 billion each from the government, with shareholders able to invest another €1 billion in each. Anglo will receive €1 billion from the state.

...

A condition of the capital injection into Anglo is that the entire board – with the exception of newly appointed chairman Donal O’Connor, a former managing partner of Price Waterhouse Coopers – resign to allow the appointment of new directors. It has been widely speculated that senior executives at other banks could also be asked to step down under the programme, but no details have yet emerged.

Souce:: The Times Online


The requirement of the board of Anglo to resign is welcomed, though I'm still against the bailout of Anglo in any shape or form by the government. THough having given the guarantee, FF really are left with no option but to throw money at them no matter what emerges.

BOI and AIB equity stake not yet released. How much should the governemnt be receiving for its injection of capital, and should their boards resign?

[Lefournier]

If AIB and BoI go for this, they must come out of denial. The Times report says the Anglo Board is gone but are we going to hand over billions to the people who drove AIB and BoI into the ditch?

[markeys]

Could be. I suspect whether the boards of AIB and BOI resign is more to do with the reaction FF will get, rather than FF doing the right thing.

Wonder how much Irish Nationwide is in line for? 5 billion is specified (2 billion each AIB, BOI, 1 billion Anglo) - does that mean 2 billion for a mix of EBS, Irish Nationwide and PTSB?
Sure be interesting to see what Irish Nationwide will receive and the terms - they've got to be on a par as Anglo, though somewhat avoiding the spotlight given their corporate status, i.e. not a public company. Does Irish nationwide also qualify as systemic risk to the system in our incompetent Minister for Finance eyes?

[Catalpa]

Folks

- can someone please tell me where the money is coming from for these 'Injections'?

My understanding is that savage cutbacks in Public Services are on the cards in 2009 because 'we can't afford it'.

So how can we afford Billions to bail out these er Bankers?

[SPN]

The requirement of the board of Anglo to resign is welcomed, though I'm still against the bailout of Anglo in any shape or form by the government. THough having given the guarantee, FF really are left with no option but to throw money at them no matter what emerges.

If the Board are gone, and the shareholders are diluted to f*ck, then it isn't really a bailout - as in none of the badguys benefit.

We've got to try and trade our way out of this because default isn't (currently) an option.

BOI and AIB equity stake not yet released. How much should the governemnt be receiving for its injection of capital, and should their boards resign?

The Boards should resign, and the injection of capital should be at a discount to the current market price.

The injection of capital should also be ringfenced from any betting the current management has been doing in the derivatives market. Derivatives - particularly Credit Default Swaps - are going to blow up in Q1 2009, and the Irish taxpayer should not be exposed to the massive bets that I assume the Irish Banks are exposed to.

..
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[markeys]

I think this falls under FF's ingenious plan to raid the pension reserve and to hell with the future.


I think its safe to assume at this stage the pension fund will be empied and the remainder borrowed. To hell with the future x 2.

[goosebump]

I think its safe to assume at this stage the pension fund will be empied and the remainder borrowed. To hell with the future x 2.

There is €16bn in the pernsion reserve. The pension reserve is invested in equity anyway. This just involves altering the portfolio, albeit that the portfolio will be considerably less diversified.

[goosebump]

How much should the governemnt be receiving for its injection of capital, and should their boards resign?

Its receiving equity in the company. Do you understand what this means?

[markeys]

16$ bn? Once the flood gates are opened on the pension reserve, FF won't be able to control themselves. The Unions will be wetting themselves with glee at the prospect of FF having more money to throw at them rather than tackling the underlying problems in the public sector.

I expect to see us going back to the pension fund for a second instalment, once the true scale of capitalisation required for the Irish banks is revealed. the UK, after only a few months, is already actively considering a second trance of funding for HBOS.

[goosebump]

16$ bn? Once the flood gates are opened on the pension reserve, FF won't be able to control themselves. The Unions will be wetting themselves with glee at the prospect of FF having more money to throw at them rather than tackling the underlying problems in the public sector.

The pension reserve already belongs to the unions. It exists to pay their pensions. Even they aren't stupid to spend their pensions on pay hikes. That's why there has never been an instance of a union rep calling on the Government to use the pension reserve.