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Author Topic: [Irish Times] Bank deposits may be at risk due to EU regulation  (Read 5094 times)
razibuzouzou
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May 15, 2013, 08:07:12 AM
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Similarly to what happened to Cyprus last month, it seems like big Irish bank accounts may be at risk due to EU regulation.

News article : http://www.irishtimes.com/business/sectors/financial-services/bank-deposits-of-over-100-000-may-be-at-risk-1.1384295
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May 15, 2013, 08:42:00 AM
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No comment section.  Too bad.

Dankedan: price seems low, time to sell I think...
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May 15, 2013, 08:51:19 AM
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Under a compromise text proposed by the Irish presidency, uninsured deposits of over €100,000 would be bailed in in the event that a bank is resolved, but depositors would rank higher than other creditors in the event of a wind-down.

In this scenario – known as “deposit preference” – depositors would rank at the very end of the process, with other creditors first absorbing losses.

However, some member states have not ruled out the possibility that insured deposits, i.e. deposits under €100,000, would be forced to bear losses in the event of a bank collapse even though these deposits would be likely to be protected by the deposit guarantee scheme.

Most banks in europe are insolvent

Thing is  ... so are the the insurers, which are the govts ... I just dont see how this insurance is at all credible ...
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May 15, 2013, 09:17:08 AM
 #4

Similarly to what happened to Cyprus last month, it seems like big Irish bank accounts may be at risk due to EU regulation.

News article : http://www.irishtimes.com/business/sectors/financial-services/bank-deposits-of-over-100-000-may-be-at-risk-1.1384295

NOTE: please correct any information below if wrong because I did not verify my sources and I'm just writing what I remember on top of my head.

Ireland has less that 5 million inhabitants. Irish debt does NOT come from government spending out of control. It has two main sources:

1. Toxic derivatives. Anglo Irish Bank was mainly used as a dump for those. It was bailed out by the government (which was in turn bailed out by EU) then it went bust.
Anglo Irish Bank  was only serving the financial sectot not the public. Rumour has it that the German-led EU posed rescue of Anglo Irish Bank as a condition to the Irish government for the EU bailout. Bad mouths say it was because German banks had purchased debt from Anglo Irish that they needed to wash their hands off before closing it down.
As opposed to going to jail, former Anglo Irish Bank managers got a rich performance bonus.

2. Unpaid mortgages. At the peak of the housing bubble in 2007 real estate prices were 2 times and half what they are now. There are 90 thousand homes in Ireland whose mortgage hasn't been paid for more than 90 days. The banks are legally entitled to repossession - yet there are only few houses for sale on the market. Rumour has it that banks are not willing to sell the properties at a loss because it is more convenient to them to try and get another bailout - hoping they get third-time-lucky, who knows.

In regards to banks' liquidity situation in Ireland - rumour has it that Bank of Ireland is fine but Allied Irish Banks (no. 2) is in deep shit.

Meanwhile most Irish top bank managers are still being paid generous bonuses for having been able to negotiate bailouts with their friends at the government.

I believe Ireland is going to be the next testing ground for the Cyprus idea. The Irish Times article is already starting the "lesser evil" sweet-talk-bullshit.

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May 15, 2013, 09:32:27 AM
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As far as I was aware, Ireland suffered from easy lending and being a gateway to the EU for US companies. This meant that it got a lot of infrastructure funding, which then ballooned the property prices, and this funded extravagant lifestyles.

The difference with Ireland, is that people knew it was happening, and just rode the boat, knowing it would come to an end eventually.
Other countries, such as the UK thought it was mostly down to what their governments were doing, and didn't see it was just an easy credit boom until it was much later!

Ireland is bust in the traditional sense, however, unlike previous recessions, this time, all the financial institutions know that if they don't start scrambling for debt recovery, then we won't get serious poverty.  They all know that if we were to add up all our holdings, we would not get anywhere near our debts, so why not play the long game?

This time, Europe is going through stagflation for a decade - don't expect any real growth until 2020 and even then its only going to happen if we find a new industry to invest in - maybe like bitcoin etc.

Until then, expect the EU to flex its muscles every few months - while ignoring that its own accounts haven't passed auditing in almost 20 years - pot kettle black etc! Smiley



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melvster
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May 15, 2013, 09:37:17 AM
 #6

Similarly to what happened to Cyprus last month, it seems like big Irish bank accounts may be at risk due to EU regulation.

News article : http://www.irishtimes.com/business/sectors/financial-services/bank-deposits-of-over-100-000-may-be-at-risk-1.1384295

NOTE: please correct any information below if wrong because I did not verify my sources and I'm just writing what I remember on top of my head.

Ireland has less that 5 million inhabitants. Irish debt does NOT come from government spending out of control. It has two main sources:

1. Toxic derivatives. Anglo Irish Bank was mainly used as a dump for those. It was bailed out by the government (which was in turn bailed out by EU) then it went bust.
Anglo Irish Bank  was only serving the financial sectot not the public. Rumour has it that the German-led EU posed rescue of Anglo Irish Bank as a condition to the Irish government for the EU bailout. Bad mouths say it was because German banks had purchased debt from Anglo Irish that they needed to wash their hands off before closing it down.
As opposed to going to jail, former Anglo Irish Bank managers got a rich performance bonus.

2. Unpaid mortgages. At the peak of the housing bubble in 2007 real estate prices were 2 times and half what they are now. There are 90 thousand homes in Ireland whose mortgage hasn't been paid for more than 90 days. The banks are legally entitled to repossession - yet there are only few houses for sale on the market. Rumour has it that banks are not willing to sell the properties at a loss because it is more convenient to them to try and get another bailout - hoping they get third-time-lucky, who knows.

In regards to banks' liquidity situation in Ireland - rumour has it that Bank of Ireland is fine but Allied Irish Banks (no. 2) is in deep shit.

Meanwhile most Irish top bank managers are still being paid generous bonuses for having been able to negotiate bailouts with their friends at the government.

I believe Ireland is going to be the next testing ground for the Cyprus idea. The Irish Times article is already starting the "lesser evil" sweet-talk-bullshit.


Pretty much ... also dont forget the irish real estate bubble

Ireland has the presidency so it's a template for all europe

Irish banks are insolvent ... perhaps the most insolvent in the world

We're certainly going to see haircuts, this is expectations management to say they will take deposits over 100k.  They will also (and have) taken up to 100% of irish pensions.  I dont see insured deposits as being safe either.

So what it boils down to is that some bankers have been paying themselves bonuses out of the future deposit base.  They use the black swan, 'we were fooled by randomness' technique as plausible deniability.  It's not necessarily criminal, but if you put incentives there, people are going to do exactly this.  Bitcoin was invented to take these incentives away.
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May 15, 2013, 09:41:36 AM
 #7

As far as I was aware, Ireland suffered from easy lending and being a gateway to the EU for US companies. This meant that it got a lot of infrastructure funding, which then ballooned the property prices, and this funded extravagant lifestyles.

The difference with Ireland, is that people knew it was happening, and just rode the boat, knowing it would come to an end eventually.
Other countries, such as the UK thought it was mostly down to what their governments were doing, and didn't see it was just an easy credit boom until it was much later!

Ireland is bust in the traditional sense, however, unlike previous recessions, this time, all the financial institutions know that if they don't start scrambling for debt recovery, then we won't get serious poverty.  They all know that if we were to add up all our holdings, we would not get anywhere near our debts, so why not play the long game?

This time, Europe is going through stagflation for a decade - don't expect any real growth until 2020 and even then its only going to happen if we find a new industry to invest in - maybe like bitcoin etc.

Until then, expect the EU to flex its muscles every few months - while ignoring that its own accounts haven't passed auditing in almost 20 years - pot kettle black etc! Smiley




wait wait

this is a mixed up argument

we have controls in place to prevent this happening ... that's the banking sector ... this is their CORE BUSINESS and PRIME FUNCTION ... it's not a side line ... they give loans based on ability to repay and are extremely well rewarded for this ... banks have a monopoly on this function

the loan takers are NOT to blame, because they are not the experts here, nor are they expected to be, they go to a bank and the bank will make their decision ... it's like selling someone a car with faulty brakes and when it crashes blaming the driver ...
melvster
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May 15, 2013, 09:44:42 AM
 #8

As far as I was aware, Ireland suffered from easy lending and being a gateway to the EU for US companies. This meant that it got a lot of infrastructure funding, which then ballooned the property prices, and this funded extravagant lifestyles.

The difference with Ireland, is that people knew it was happening, and just rode the boat, knowing it would come to an end eventually.
Other countries, such as the UK thought it was mostly down to what their governments were doing, and didn't see it was just an easy credit boom until it was much later!

Ireland is bust in the traditional sense, however, unlike previous recessions, this time, all the financial institutions know that if they don't start scrambling for debt recovery, then we won't get serious poverty.  They all know that if we were to add up all our holdings, we would not get anywhere near our debts, so why not play the long game?

This time, Europe is going through stagflation for a decade - don't expect any real growth until 2020 and even then its only going to happen if we find a new industry to invest in - maybe like bitcoin etc.

Until then, expect the EU to flex its muscles every few months - while ignoring that its own accounts haven't passed auditing in almost 20 years - pot kettle black etc! Smiley




Growth is techincally easy to generate, but politics gets in the way.  You need grow a secondary currency and build trust in it, then depricate the old failed currency.  This has happened many times in history.  But this time we have crypto which is a game changer ...
nwbitcoin
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May 15, 2013, 10:36:11 AM
 #9

As far as I was aware, Ireland suffered from easy lending and being a gateway to the EU for US companies. This meant that it got a lot of infrastructure funding, which then ballooned the property prices, and this funded extravagant lifestyles.

The difference with Ireland, is that people knew it was happening, and just rode the boat, knowing it would come to an end eventually.
Other countries, such as the UK thought it was mostly down to what their governments were doing, and didn't see it was just an easy credit boom until it was much later!

Ireland is bust in the traditional sense, however, unlike previous recessions, this time, all the financial institutions know that if they don't start scrambling for debt recovery, then we won't get serious poverty.  They all know that if we were to add up all our holdings, we would not get anywhere near our debts, so why not play the long game?

This time, Europe is going through stagflation for a decade - don't expect any real growth until 2020 and even then its only going to happen if we find a new industry to invest in - maybe like bitcoin etc.

Until then, expect the EU to flex its muscles every few months - while ignoring that its own accounts haven't passed auditing in almost 20 years - pot kettle black etc! Smiley




wait wait

this is a mixed up argument

we have controls in place to prevent this happening ... that's the banking sector ... this is their CORE BUSINESS and PRIME FUNCTION ... it's not a side line ... they give loans based on ability to repay and are extremely well rewarded for this ... banks have a monopoly on this function

the loan takers are NOT to blame, because they are not the experts here, nor are they expected to be, they go to a bank and the bank will make their decision ... it's like selling someone a car with faulty brakes and when it crashes blaming the driver ...


LOL! Smiley

I guess you weren't in school the day they were teaching the concept of Caveat emptor - Buyer Beware?

As the buyer you are the decision maker, not the sales person.  If I decide to sell you magic beans, and they suddenly turn out not to be magic, who's fault is that? The answer is you for being an idiot! Wink


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