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Thread: Stephen Collins defends the bank guarantee

  1. #1
    Politics.ie Member borntorum's Avatar
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    Default Stephen Collins defends the bank guarantee

    In his Irish Times article today, Collims contrasts the current situation in Cyprus with our own banking crisis in 2008 and what might have happened here:

    The Irish politicians and pundits who denounced the bailout at every step and called on the Government to defy theEurope an Central Bank are now seeing what can happen to a small country whose politicians engage in populist posturing instead of facing up to responsibilities.

    [...]

    After days of scaremongering by some high-profile broadcasters there were fears that panic was about to break out. One of the things the Government considered on the night of the guarantee was the kind of security response that might be required if disorderly crowds began to gather at banks and ATM machines trying to withdraw their money the following morning.
    Thankfully that didn’t happen but it was probably a close-run thing. The independent banking inquiry that reported in March 2011 pointed out that all of the possible policy alternatives facing the Government in September 2008 were fraught with risk and the time for decision-making was very short. “Increasingly the main issue at hand was seen as ensuring market financing for the banks at the beginning of the next day; making sure that Ireland was open for business in the morning . . . It represented on balance the ‘least bad’ option to address the immediate problem.”

    I'm not always a fan of Collins, and as per usual his article contains a blanket defence of the EU, but I think he has a point here. I've always been dubious about the point of view that all our problems lead back to that night in September 2008. The rot set in earlier, with wildly pro-cyclical policies of tax cutting, spending increases and relentless priming of the building boom. Whatever decision Lenihan and Cowen could have made that night would have had very unpleasant repercussions, and it may well be that they chose the least worst option. We will never know for sure. But it was notable to hear Eamonn Gilmore on the Six One News last night, who had been so noisily critical of the previous governmemt's policies in opposition, contrasting them favourably with the approach taken by the Cypriot authorities.

    Cypriot drama puts Ireland

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    Politics.ie Member hammer's Avatar
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    Did he mention bank regulation prior to the guarantee and the stupid ***** that were in a DELUDED FF Government ?

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    the Guarantee might have been ok but anglo should have been let go that night and save the others

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    Politics.ie Member borntorum's Avatar
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    Quote Originally Posted by hammer View Post
    Did he mention bank regulation prior to the guarantee and the stupid ***** that were in a DELUDED FF Government ?
    Spectacularly incoherent even by your standards

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    Politics.ie Member linny55's Avatar
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    Quote Originally Posted by culmore View Post
    the Guarantee might have been ok but anglo should have been let go that night and save the others
    could'nt be done , too many big knobs involved .

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    Politics.ie Member Burnout's Avatar
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    Fine Fail serving us the 'bailout dish' was just their piece de resistance after gorging on incompetence for years. But who cares, Mehole is top of the flops again.

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    I'd agree that the bank guarantee was possibly the best of a set of bad alternatives, but the set of bad alternatives was determined by the behaviour of governments over the previous decade or so, so defending it misses a point. The situation in Cyprus is not dissimilar, in that their unpleasant set of alternatives is shaped by their own bank regulation beforehand. It's faint praise to be able to act not too badly in a crisis of one's own making, although it's probably better than what's been displayed by the Cypriots so far.
    Never let the best be the enemy of the good.

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    Politics.ie Member borntorum's Avatar
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    Quote Originally Posted by culmore View Post
    the Guarantee might have been ok but anglo should have been let go that night and save the others
    I think we all wish that Anglo would have been left go to the wall.

    The question was and is: would it have brought the rest of the financial sector down with it?

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    Politics.ie Member dresden8's Avatar
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    Quote Originally Posted by culmore View Post
    the Guarantee might have been ok but anglo should have been let go that night and save the others
    The purpose of all Irish banking policy was to keep the Anglo scandals under wraps.

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    Politics.ie Member commonman's Avatar
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    A lot of FF supporters are starting to come out of the woods this last month or so Joe Duffy is another Collins always had a soft spot for FF the most smell power coming back to them.

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