Richard Bruton losing credibility.

[trustno1]

Bruton fears over-the-top banking curbs - Irish, Business - Independent.ie

The story above references a conference held in Dublin over the weekend at which Richard Bruton spoke and where a group of experts stated that Ireland must be careful not to damage the financial services sector when reforming banking regulation. Bruton is quoted as saying that Ireland's financial problems have been triggered by a property bubble, not complex financial instruments, and any changes in regulation should reflect this.

A very parochial attitude methinks.

What planet is this guy on?? You can't for one minute ignore what happened in the US and elsewhere where it was these very same complex financial instruments which were used to repackage mortgage debt and which US banks sold on to investors (other banks). When the subprime balloon went up and the bottom fell out of the market, these so called assets were not worth jack sh1t. As a result, banks around the world started to take big losses on these financial instruments. Contagion in the banking sector ensued and you could argue this is when the house of cards which was Anglo came a cropper. Banks with big exposures to residential & commercial investments & development fell out of favour with the market and nobody wanted to lend them money thinking they would go the same way as Lehman's. The rest is history.

Could someone please explain why Bruton would want to peddle this line. He also seems to have completely forgotton about Depfa and Sachsen to name a few in his own back yard....all at the end of the day licensed as banking entities in this state.

[Lloyd-Apjohn]

But can't it be argued that if certain people had not been given mortgages they could not afford that would not have fueled the bubble? I'm sure these products have been used all the time in various formats and were fine as long as everything went ok which by and large it did. This is the first bubble to explode so badly since the depression?

The other side issue is why banks were allowed to sell mortgage products with built in interest rate rises that were never explained. That is a failure of regulation.

[McEavelli]

You can't for one minute ignore what happened in the US and elsewhere where it was these very same complex financial instruments which were used to repackage mortgage debt and which US banks sold on to investors (other banks).

Blaming the US subprime doesn't explain why the UK and ourselves are the 2nd worst and worst affected countries does it?

[geraghd]

Bruton fears over-the-top banking curbs - Irish, Business - Independent.ie

The story above references a conference held in Dublin over the weekend at which Richard Bruton spoke and where a group of experts stated that Ireland must be careful not to damage the financial services sector when reforming banking regulation. Bruton is quoted as saying that Ireland's financial problems have been triggered by a property bubble, not complex financial instruments, and any changes in regulation should reflect this.

A very parochial attitude methinks.

What planet is this guy on?? You can't for one minute ignore what happened in the US and elsewhere where it was these very same complex financial instruments which were used to repackage mortgage debt and which US banks sold on to investors (other banks). When the subprime balloon went up and the bottom fell out of the market, these so called assets were not worth jack sh1t. As a result, banks around the world started to take big losses on these financial instruments. Contagion in the banking sector ensued and you could argue this is when the house of cards which was Anglo came a cropper. Banks with big exposures to residential & commercial investments & development fell out of favour with the market and nobody wanted to lend them money thinking they would go the same way as Lehman's. The rest is history.

Could someone please explain why Bruton would want to peddle this line. He also seems to have completely forgotton about Depfa and Sachsen to name a few in his own back yard....all at the end of the day licensed as banking entities in this state.

So how much exposure did the three main Irish banks (AIB, BOI, and Anglo) have to financial derivatives, and how much exposure did they have to the Irish property market?

[fergalr]

Blaming the US subprime doesn't explain why the UK and ourselves are the 2nd worst and worst affected countries does it?

Well Britain was pretty hard hit with the subprime cluster...mess. Insane derivative trading. And RBS is one of the world's biggest banks. And some of the big French and German banks too.

[mollox]

Bruton fears over-the-top banking curbs - Irish, Business - Independent.ie

Bruton is quoted as saying that Ireland's financial problems have been triggered by a property bubble, not complex financial instruments, and any changes in regulation should reflect this.

Could someone please explain why Bruton would want to peddle this line. He also seems to have completely forgotton about Depfa and Sachsen to name a few in his own back yard....all at the end of the day licensed as banking entities in this state.

Bruton is right and you are wrong.
Ireland's bank-related problems don't generally involve the IFSC-based banks, they're mainly related to the domestic banks.
None of these took a substantial hit from buying "toxic assets" i.e. deriviatives or securitised US sub-prime mortgage packages.. Nor were they sellers of these products.

While new regulation will have to cover the IFSC, the primary focus for the banking health of Ireland Inc should be on the causes of the collapse of the Irish banking system - and that will be largely related to property investment and the funding model for future lending.

[Cael]

Anybody who thinks FG in power will make any difference is absolutely deluded. Neither FG or FF have any other idea in their heads or any other ambition, except to get the property bubble up and running again, and fvck a new generation of young people.

[Cael]

Bruton is right and you are wrong.
Ireland's bank-related problems don't generally involve the IFSC-based banks, they're mainly related to the domestic banks.
None of these took a substantial hit from buying "toxic assets" i.e. deriviatives or securitised US sub-prime mortgage packages.. Nor were they sellers of these products.

While new regulation will have to cover the IFSC, the primary focus for the banking health of Ireland Inc should be on the causes of the collapse of the Irish banking system - and that will be largely related to property investment and the funding model for future lending.

A chara, please stop using that term "Ireland Inc." its a hangover from the most brainless days of the Celtic Dodo.

[Dios]

Bruton is quoted as saying that Ireland's financial problems have been triggered by a property bubble, not complex financial instruments, and any changes in regulation should reflect this.

Hmm. Looser regulations -> complex financial instruments -> riskier lending since the banks thought they were covered -> property bubble. Its a disturbing comment from a well regarded figure, if its not taken out of context or something.

[Gimpanzee]

Hmm. Looser regulations -> complex financial instruments -> riskier lending since the banks thought they were covered -> property bubble.

Dios - there is a flaw in your sequence. The banks weren't throwing money at the developers and purchasers because they thought they were covered, they were throwing money at them because they didn't think it was risky in the first place.

You could tighten up regs on derivatives and the likes, but it wouldn't solve anything. Its the simple financial instruments we need to be looking at. For example, I know of a couple that are buying a house for just over half a mill now and they got knocked back on the mortgage by AIB. So they went to a broker, who got them a mortgage right away. With AIB. This stuff is still going on.