There is much discussion on this site and others, that the new government is in a strait-jacket by reason of the complete mess the last government left them with. There is nobody who can disagree with this statement.
But there is also a repeated suggestion, that the reason no bondholder wil/should be left behind, is because of the Bank Guarantee of 30th September, 2008. That does not appear to be so.
Dαil Ιireann - 01/Jun/2011 Written Answers - Financial Institutions Support Scheme92. Deputy Stephen Donnelly asked the Minister for Finance:
the total euro amount of unguaranteed secured and unguaranteed unsecured senior bonds in the guaranteed Irish banks which have been paid back to bondholders to date; the estimate for the total amount outstanding for these categories of bonds which will be paid out; and if he will make a statement on the matter. [13818/11]
Minister for Finance (Deputy Michael Noonan): In answer to the Deputys question, the Central Bank of Ireland has provided me with the following details:
Unguaranteed Senior Secured. Unguaranteed Senior Unsecured.
Amount repaid since 29 September 2008 1,298 million 6,029 million
Amount outstanding as at 30 May 2011 19,632 million 16,306 million
The above amounts are at current foreign exchange rates and the Deputy will appreciate that the amounts can fluctuate as exchange rates change.
Here were the full figures from the Central Bank.
Sorry, I may have missed the explanation (or a thread or two on it) but I just can't see the rationale why this new government will do this? Is there a link to say the whole banking system will collapse if the normal rules of capitalism are followed? Is there evidence of a dictat from the ECB? Are Fine Gaelers just honourable people who think debts of honour should be repaid?
(The distinction between secured and unsecured bondholders might also be blindingly obvious - but what is it secured against?)
β¬7.3bn: the cost of bailing out unguaranteed bank bondholders so far · TheJournal