Finance Dublin calls for nationalisation of banks!

[BodyofEvidence]

Oh those mad raving commies that dont understand how the international financial services system works. Naieve fools

As they say themselves FinanceDublin.com - About Us

FINANCE DUBLIN - is 'the bible of the IFSC', the monthly periodical covering the companies and activities in the world's tenth rated financial centre (GFSC Survey March 2009).

posted initially on The Irish Economy Blog Archive FinanceDublin Editorial on NAMA
directing to
FinanceDublin.com -

It is now time to call a halt. The provision in the NAMA legislation that enables equity shareholders in the banks at the time of the crash (Autumn 2008) to emerge with anything more than a non zero sum should not be invoked at the expense of the taxpayer.

A moral hazard also exists in regard to the subordinated debt and deposit guarantees. This publication supported the decision to introduce it in October 2008, because it was necessary to protect the systemic integrity of the money system at the time of the bank guarantee. The blanket guarantee introduced then now has a little more than a year to run, and proposals should begin to be put in place to make an orderly withdrawal from that arrangement too, with a target for the reasonable medium term of scaling back the extent of the Irish guarantee to comparable international levels.

If moral hazard was cleared out of the equation regarding the banks entering the NAMA/Guarantee scheme, then the taxpayer-owned NAMA and the taxpayer-owned banks will not have an embedded conflict of interest in determining the valuation of assets. This could facilitate an orderly re-financing of the banking system, and the restoration of stability to the property market (which will be a required element in any economic stabilisation plan for the Irish economy).

At the end of the day, such a solution will require ‘nationalisation’. In normal circumstances it would be anathema for this publication to suggest such a course, but the system is broken, and must be put under repair, before a new privatisation of the banks concerned takes place.

When the time for re-privatisation of Irish banking comes, and it should at the earliest available opportunity, the new framework that should be established must have moral hazard stripped out of the equation for once and for all, and that applies to all aspects of the new framework. That will include the remuneration of the executives that will run the Irish banks of the future. One of the lessons of the present crisis is that incentivising management with equity options was a recipe for encouraging the imprudent risk taking that bedevilled the global and Irish banking systems.

[HarshBuzz]

they have it wrong

don't nationalise them, let them go bust and then set up a state-run bank

[BodyofEvidence]

I wonder where SPN and all the other NAMA's fine cheerleaders are. Interesting that the professionals much loved by people such as MortgageBroker are lining up alongside the academics he derides....oh well....

[wysiwyg]

Why don't our politicians start being completely honest with us. It is becoming more and more apparent that we are on the way to handing over billions of euro for NAMA...and then becoming involved in part of full nationalisation anyways...

Hannah Nama - The Worst of both Worlds

[libertarian-right]

I wonder where SPN and all the other NAMA's fine cheerleaders are. Interesting that the professionals much loved by people such as MortgageBroker are lining up alongside the academics he derides....oh well....

But Sean Dunne support's NAMA. Frank Fahy too. The media are starting to realise that they should not be talking to professionals, academics, economists and investors but rather politicans that used to be teachers, barristers, social workers and those slimely vested interests.

[BodyofEvidence]

But Sean Dunne support's NAMA. Frank Fahy too. The media are starting to realise that they should not be talking to professionals, academics, economists and investors but rather politicans that used to be teachers, barristers, social workers and those slimely vested interests.

another editorial in the same publication also suggests that the ECB arent fully online with the gov

[netron]

another editorial in the same publication also suggests that the ECB arent fully online with the gov

this is worth a read

True Economics: Economics 02/09/2009: ECB legal eagles picking at the NAMA carcass

[BodyofEvidence]

One wonders when the government will wheel out a non-vested interest to comment with favour on nama-plus-overpayment? There surely must be someone somewhere....

[goosebump]

Oh those mad raving commies that dont understand how the international financial services system works. Naieve fools

As they say themselves FinanceDublin.com - About Us


posted initially on The Irish Economy Blog Archive FinanceDublin Editorial on NAMA
directing to
FinanceDublin.com -

That editorial is out of date. There most recent editorial is supportive of NAMA:

eg

"If E15 - E20 billion turns out to be the capital cost of the great NAMA gamble then it can be seen as a wise and necessary investment."

KW has posted it in the Comments to the original blog post.

[BodyofEvidence]

That editorial is out of date. There most recent editorial is supportive of NAMA:

eg

"If E15 - E20 billion turns out to be the capital cost of the great NAMA gamble then it can be seen as a wise and necessary investment."

KW has posted it in the Comments to the original blog post.

This bit must have stuck in your throat goosepimple....

We have also argued that the principle of avoiding moral hazard should apply not just to the interests of past shareholders and other risk investors in the banks, e.g. subordinate debt holders, but it should also apply to future risk investors, with regard to any future clawbacks that may be contemplated (e.g. through a future bank levy), which, while on the face of it will be paid by ‘the banks’, will in reality be recouped from customers and ordinary taxpayers.
The fact that the ECB’s Opinion also addresses this point is also to be welcomed. Perhaps the most satisfactory aspect of the ECB document is that it provides the Government and NAMA with a roadmap by which it can proceed. In essence, this is because it ensures that the principles of diminishing and avoiding moral hazard are adhered to in the detail of the operation, construction, policy, and detailed oversight of NAMA.
The ECB Opinion preserves the essential capitalist principles that most observers in the debate on NAMA would subscribe to (this would include most of the 46 academic signatories to the petition organised by Prof Brian Lucey of TCD, as indeed it may the Labour Party’s Joan Burton, who, in June in the 2nd stage of the Financial Measures (Miscellaneous Provisions) Bill debate in the Dail asked whether moral hazard had any place in the Minister’s universe).

oooh, look.....real practitioners supporting the "gang of 46".....