[quote
A state run bank won't recover.
A publicly quoted bank will be run efficiently, be answerable to the markets and, if there is a recovery, the state will own most of the shares.
[/quote]
Firstly based on history banks are not answerable to the markets or anyone else. I could not careless if they never recover. All I care about is reducing the damage to future tax payers as much as is possible. If we doomed either way might as well get some join from ruining the bankers lifes too.
I woudl love to see this happening (from a purely selfish point of view) as it would in effect wipe out my mortgage.Originally Posted by LeftOfCentre
However from a realistic point of view.
New bank opens, old ones immediately suffer a serious withdrawal of funds pushing them under. Ok all deposits are guaranteed but it would take months to get it all sorted out pretty much wiping out cash flow overnight.
The current ATM system would be redundant as its owned by the existing banks (excluding of course the ones owned by the non Irish banks)
Then my employees where would I pay their wages ? Into failed banks ? What bank would I get my invoices paid into ? Where would I get the cash to pay wages ?
Your limit is set to 100K. Where would I get cash flow to cover my invoices ?
It would effectively shut down all business in the country and completely stop cash-flow. No one would have access to cash.
Why do you need more than one bank to maintain a cash flow?
One ATM system would be fine surely?
Who cares if all money is withdrawn from bad banks?
One very well funded bank that is publicly owned would be great for healthy businesses I would have thought.
No will never again see working capital in the Irish system unless the debts are cut loose to another bank.
I think it is nationalize and then NAMA.
Would seem like the right thing to do in the interests of the country.
Problem - our Government is only interested in protecting it's 'buddy system'.
Think your right there.
That is what was done (although not with all the banks) in Sweden.
There is still a legitimacy and legacy problem with this government doing it though.
Two banks were nationalised in Sweden and those were the two whose toxic debts were bought by the Government. It's not the proposition here.
On the subject of NAMA, was talking to a very senior civil servant sunday who said that the civil service does not have the experience to run the orginisation, obviously (he laughed when someone suggested bods from Finance), and thinks that the whole thing is doomed to failure as, as I indicated before, the Government announced something in the mini budget which they do not understand and the detail is only coming to Cabinet Tuesday. He said it has the potential to be an absolute behemoth of an orginisation, costing MILLIONS to run, and the alternative, of contracting out bits of it, is fraught with difficulty as it possibly lacks control.
Overall, he was not impressed that they did not have the whole matter presented in detail, with associated costs, when they announced it. His point being that they have had months and months to come up with a detailed proposal and all we get is more back of the envelope jobs.
Oh, the general impression at our usual gathering was that Peter Bacon is unimpressive and had already indicated that he did not wish to run NAMA.
Under no circumstance would your mortgage be wiped. It would be transferred to the new bank.
ATM remains and new bank gets access. It's not that difficult.
The good bank obviously.
Nonsense. You sound like one of the existing bankers... using scaremongering tactics to stop the correct action being followed.
Think for a second.
Just imagine your bank account is based in bank A. Your wages are paid into it, your direct debits are paid out of it.
New government bank opens. overnight bank a goes under. Your account is now effectively locked. Bank A's ATMS are no longer filled. You have no access to your cash. Your wages are due in two days. You run to the new bank and open an account but there are queues of people trying to do the same, anyway you have no cash with which to open an account.
You go to your employer and ask to be paid by cheque. He smiles and hands you a cheque drawn on his account at bank A. Its worthless. He cannot access cash to pay you.
OK your deposits are guaranteed to 100K but how long ill that take to sort out ?
Your employer probably needs much more than 100K to pay wages, suppliers, tax man, rates etc. He cannot even get invoices paid.
It would be chaos...... You cannot shut down and rebuild the entire banking sector overnight and its the only way it could be done. The second it was discovered that the government was letting the banks fall there would be a run on deposits and they would be gone.
So in a matter of seconds you need to create a new bank, open branches, build an IT infrastructure, build and ATM network, and cheque clearing network, staff it and hire thousands of extra staff to deal with the influx of people opening accounts, changing direct debits, trying to draw cash etc.
Just because it would be popular doesn't make it a good idea.
LOl this is funny stuff. How long will it take for this "New bank" to buy all the assets of the old banks ? Will it buy the debts also ?
So this new bank is going to buy the ATM infrastructure from the existing banks and integrate them into its IT infrastructure overnight ?
And how exactly is that going to happen ? All my money is in an account in the old banks which are gone under. I have to open an account in the new back, wait for the government to give me back €100K of my money, my employees have to open new accounts, my payroll has to change all the direct debits and then we gotta hope that from the 100K I have enough to pay wages, invoices and suppliers. And all that is going to happen overnight.
Realllllllllllllllllly.
And you sound like someone who has hit on a "brilliant" idea without thinking it through.
Its a stupid idea, in fact its worse than stupid, its idiotic, its suicidal truly worthy of a Darwin award for the entire country. Its even worse than a bad idea because it will start an whole group of similar idiots thinking along the same lines and shouting for it in the press where some populist political party will jump on the idea and actually attempt to carry it out.
If the Irish banks fall we are all well and truly screwed.
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