What would happen if we nationalised all the banks?

[adrem]

It's not a teaser - I don't know.

I was wondering though if we would be better off immediately nationalising all of the banks and then look at bad bank, mergers, restaffing the top etc etc

I'm not a left wing "nationalise everything" believer so I would have to say my approach would be for this to be done on a temporary basis only.

Would it achieve anything? We are already in hock for all the deposits and for the interbank debt (through the guarantee scheme) - presumably forced nationalisation wipes out the bond holders and the equity holders (lads ye're down 95%+ so the last 5% ain't gonna make a difference).

One key advantage would be breathing space - it would take the shares off the market and stop them being pummelled out there everyday.

It would also probably give us a bit more control - as the owner we could presumably veto board appointments etc.

Is there a big downside?

Presumably if/when we get the current issues resolved we could refloat maybe 2/3 of them in some form of retail banking operation and the state could make some money out of that process too (maybe next year when a billion or 2 might be useful in the state coffers).

I don't know if it makes sense or if I've spent too much time on p.ie and have become infected with communitis !

[20000miles]

As they say, there's nothing more permanant than a temporary government program. If banks were nationalised it would probably be the death bell for capitalism, as capital won't be allocated privately anymore.

[atlantic]

We would have a government that bankrupt the country running bankrupt banks .

[zakalwe1]

given the govt's complete ineptitude at running simple systems how confident are you that they could fix the banks?

[Sucker Punch]

As they say, there's nothing more permanant than a temporary government program. If banks were nationalised it would probably be the death bell for capitalism, as capital won't be allocated privately anymore.

Of course we would privatise them when they start to make profits again, this socialism malarkey is just temporary, wait until al the losses have been nationalised and then we can get back to trickle down economics and big bonuses.

[turdsl]

Thatcher, Regan, capitalism all gone and gone for good, all the Banks will be nationalised
inside 6 months. Joe Higgins told the truth and i suppose it will take people a bit longer to admit that.

[blacbloc]

Thatcher, Regan, capitalism all gone and gone for good, all the Banks will be nationalised
inside 6 months. Joe Higgins told the truth and i suppose it will take people a bit longer to admit that.

Here's a guy in the most abject state of denial I ever saw:

Irish Examiner | Irish News | News from Ireland

It's staggering how people still cannot see or feel what is hitting them over the head.

[Sucker Punch]

Thatcher, Regan, capitalism all gone and gone for good, all the Banks will be nationalised
inside 6 months. Joe Higgins told the truth and i suppose it will take people a bit longer to admit that.

Ahh yes, but we'll get the special varient of corporate socialism and capitalism for everyone else.

[seabhcan]

First, it would cost a lot of money, because the shareholders would have to be conpensated. Its cheaper to wait for the bank to go belly-up because then the shares are worthless. The Anglo nationalisation will probably not require compensation to shareholders.

Second it would cost a lot of money, because all future capital investment would have to come from state funds. Its still possible that AIB and BoI can raise substantial additional funds from selling shares. A fully nationalised bank would not be able to raise private investment.

Third, it would cost a lot of money because the entire international liabilities of the banks would have to be put on the government books. In the UK, its likely that the non-deposit liabilities of the nationalised banks will be counted as national debt - putting the UK at 150% debt of GDP. In Ireland the figure would be around 200%

AIB and BoI are, despite what you read in p.ie, relatively heathy. AIB will pay a sizable dividend this year.

[20000miles]

Thatcher, Regan, capitalism all gone and gone for good, all the Banks will be nationalised
inside 6 months. Joe Higgins told the truth and i suppose it will take people a bit longer to admit that.

And even with nationalised banks and stock markets, government central banks and strict oversight, they'll still find a way to blame "capitalism" for recessions!