As reported in the Irish Times, Patrick Hohohan said yesterday that about half of the cost of dealing with the Irish banking crisis had fallen on shareholders and about half on the Exchequer.
Anglo costs less than what was 'touted around' - The Irish Times - Tue, Sep 21, 2010
This eyecatching claim came in the question and answer session, and does not feature in the speech he gave, which is available here:
Address by Governor Honohan to the SUERF Conference
Interesting comments here on the Icelandic and Latvian responses, among other things.
The quoted remark is hardly off the cuff, and we are likely to hear a lot of this claim in the continuing effort to justify Ireland's truly unique approach to the bailout.
But has it any basis in reality? What kind of assumptions would have to be made in order to make the case that the shareholders are coughing up as much as the taxpayers? I can't imagine that a calculation based on the decline of share prices in advance of 30 September 2008 is relevant, because the costs of dealing with the crisis arose after this date. Is he lumping bondholders together with shareholders? If not, the implication is that they have escaped without bearing any of the cost.
Perhaps the Bank can share the calculations behind this claim with the much put upon taxpayer.
And while they are at it, they could disaggregate the figures to show what share of the burden on the taxpayer is down to the two that should have been let fail, Anglo and ILP.
Edit (mmclo factchecking Gadfly): Not ILP.