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Thread: Can anyone explain Anglo

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    Politics.ie Member topcat4's Avatar
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    Default Can anyone explain Anglo

    This might seem a stupid question, but can anyone explain why we are putting 24 plus billion into this wreck of a bank.

    (1) It was a private bank.
    (2) It had no systemic importance
    (3) It was not equivalant to an "Irish" Lehman's investment bank

    I don't like, but understand NAMA, in theory at least it can work, but for what earthly reason are we propping up this Bank.

    Please, I know with a thread like this it can just become another platform to knock FF (and while this is justified) it is not the purpose of the thread.
    Can anyone make ANY kind of case to justify this huge investment.

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    Politics.ie Member DeputyEdo's Avatar
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    Well regardless of why they decided to pump money into it at the start, they won't stop now, as that would be the same as admitting defeat and admitting they were wrong.

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    Politics.ie Member MsAnneThrope's Avatar
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    I keep asking myself if Irish investment and pension funds invested and/or deposited heavily in Anglo. Also, it was widely reported that Michael Somers of the NTMA stopped putting money into Anglo in late 2008. Are we to deduce from this that the NTMA did put a lot of money on deposit there prior to this, or bought bonds?

    Anglo/Fitzpatrick was the golden boy in Irish banking, and very few perceived Anglo could do any wrong. So how many other powerful Irish investment and pension fund managers joined the stampede into Anglo in the hope of 'easy money'?
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    I would also like like to see a simple ABC of Anglo, for the case for and against. A lot of people are hazy on NAMA also- haircuts and all the rest. Are there any fairly simple guides to both ?

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    Politics.ie Member Libero's Avatar
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    Short version:
    Anglo was of systemic importance as of September 2008. A decision was taken to guarantee it and other institutions in order to safeguard the entire banking system - a collapse of which would have been utterly catastrophic.
    It's open to debate whether or not the guarantee given was the best solution but it was given and has to be honoured today in the case of Anglo, or else other banks under the guarantee will suffer a run.

    Slightly longer version: If Anglo is allowed to collapse, a lot of very well-connected people get their loans called in... And a liquidator gets appointed to wind up the bank, and a whole lot of secrets come tumbling out... There's also the small matter of a lot of p1ssed-off bondholders, whoever they are...

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    Politics.ie Member Hewson's Avatar
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    I'm not sure that even Anglo can explain Anglo. To me it's a rope tied to a rock that we've tied around our necks and thrown into the deep water. Logic would dictate that a private bank that goes bust should have its depositors protected by the State but that bondholders should take a hit. Bondholders are gamblers who take a calculated risk when lending, either to banks or to governments. They lost on Anglo and I'm damned if I know why you and I will be working for the next couple of decades to ease their pain.

    It should NEVER have been given a blanket guarantee by the state. I can only imagine that the idea of a large Irish bank sinking into oblivion scared the living daylights out of the Department of Finance to such an extent that they panicked. The fear that Anglo's demise would bring down AIB and BOI was real. With hindsight, I suspect that, knowing what they now know, Finance might have done things a little differently today. But it's too late now, we're stuck with this bloodsucker that will leech the lifeblood out of our economy for years to come.

    What sickens me is that the scum in suits responsible for the financial rape of a nation are still on the outside of prison bars.
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    Politics.ie Member Fir Bolg's Avatar
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    Quote Originally Posted by Libero View Post
    Short version:
    Anglo was of systemic importance as of September 2008. A decision was taken to guarantee it and other institutions in order to safeguard the entire banking system - a collapse of which would have been utterly catastrophic.
    It's open to debate whether or not the guarantee given was the best solution but it was given and has to be honoured today in the case of Anglo, or else other banks under the guarantee will suffer a run.

    Slightly longer version: If Anglo is allowed to collapse, a lot of very well-connected people get their loans called in... And a liquidator gets appointed to wind up the bank, and a whole lot of secrets come tumbling out... There's also the small matter of a lot of p1ssed-off bondholders, whoever they are...

    Why not just guarantee BoI and AIB and let the rest go to the wall? Why did Anglo have to be included?

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    Quote Originally Posted by Fir Bolg View Post
    Why not just guarantee BoI and AIB and let the rest go to the wall? Why did Anglo have to be included?
    They simply cashed in the Insurance policy bought at the tent in Galway.

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    Quote Originally Posted by Fir Bolg View Post
    Why not just guarantee BoI and AIB and let the rest go to the wall? Why did Anglo have to be included?
    Anglo didn't have to be included.

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    Politics.ie Member jpc's Avatar
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    The German goverment had to rescue Hypo Bank due to dreadful dealing in the IFSC.
    We are know the bond holders were "investing" money in Anglo. Again they are meant to be professional investors take risks etc.
    But the German and other European goverments would be cleaning up the mess if the bondholders were told "Take a hike"
    Maybe they said. No boys its your mess we ain't cleaning it up you were supposed to be regulating Anglo. Look at the mess we had to pay for in the Hypobank IFSC debacle that you also were regulating.
    We won't give you the money to keep going if you let the bondholders crash and burn.
    So we are where we are.
    Last edited by jpc; 16th August 2010 at 02:00 PM.
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