Irish government guarantee bank deposits

edwinac_2

Check out the impressive set of interactive graphics on ft.com..





Ranking the banks by their loan-deposit ratios and by their ratios of assets to national GDP, the Icelandic banks look particularly precarious, and the Irish banks look distinctly nasty, too.

There isn't a hope in Hell's chance that Iceland's taxpayers could find 623% of national GDP to bail out Kaupthing,...

The global banking system is irretrievably broken. It is finished.

The last time there was a crash of this enormity was back in the 14th century when the Lombard bankers, headed by the Houses of Bardi and Peruzzi, looted all the kingdoms of Europe..

We are entering a New Dark Age...

ed123_2

...I tend to agree,the level of derivatives now are approx. double the level before the '29 crash...when this lot unwinds we will see a depression worse than the '30's...

edwinac_2

The FT's Lex column says the following today.....

Today liabilities for Irish banks are more than double GDP.

Guarantees are "cheap to give but ruinous to honour"..

ian-d

Does that chart suggest that those with a high asset value and low asset to GDP value are probably the safest? I still have my concerns over Kaupthing!

pumpndump

gozomark wrote: »

Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society

Thanks Gozomark. I'n hopping a plane tomorrow!

edwinac_2

ian-d wrote: »

Does that chart suggest that those with a high asset value and low asset to GDP value are probably the safest? I still have my concerns over Kaupthing!

The FT's interactive chart is here..

Are European banks too big to fail?

I guess the thinking is that a bank - such as Kaupthing - probably couldn't be bailed out by the Icelandic taxpayer because of the size of its assets (623% of the nation's GDP).

Implied is that its depositors are at greater risk of losing their cash than if they had deposited at a bank with a smaller ratio of assets to host country's GDP.

This could serve as a quality measure of a country's depositors' guarantee in relation to each bank on its soil..

I guess things are more complicated since a bank's operation can be spread over several nations, such as Fortis, which was recently propped up by massive bailouts from the Dutch, Belgian, Lux and German governments.

To add to the confusion, the German bank Hypo Real Estate was bailed out on Monday via emergency funds injected through Dublin where most of its toxic waste has been dumped.

Also, a bank in the eurozone can call on emergency funding from the ECB rather than from its host nation's government. In the case of the Icelandic banks, that leaves them looking even more vulnerable because Iceland hasn't joined the eurozone, and doesn't have access to that ECB funding...


See: American crisis? No, an Anglo-Dutch banking system collapse

gozomark

article in Irish Times

http://www.irishtimes.com/newspaper/frontpage/2008/1002/1222815461292.html

right at the bottom

"The guaranteed banks received inflows of deposits from the UK, with one Irish bank receiving a single corporate deposit of €500 million after the guarantee was announced."

roddydogs

And where, precisely would the Irish Government find all this money if several big banks went down at once?

nilrem_2

roddydogs wrote: »

And where, precisely would the Irish Government find all this money if several big banks went down at once?

They probably could not but then would that not be true about UK banks too? Surely the issues is one of confidence, just issuing this 100% guarantee has given people confidence in having their savings in Irish banks rather than shifting it which may cause problems.

IMHO the British government should do the same, I can understand why they don't want to but if it just gave savers confidence to leave their cash rather than shifting it to god knows where, (under the bed if some are to be believed!) I don't see what they have to lose TBH, they have already said they will take what ever action is necessary to protect the banks, a 100% saving guarantee would possibly prevent them having to take any other action!

Stavros_3

The 100% guarantee in the named Irish banks + other uk banks on Irish soil will become law this lunchtime. The Bankers association are bleating like hell on the unfairness of the move - TOUGH
They should be putting pressure on Brown/Darling to follow the Irish lead in the UK before even more depositors move their brass there

http://www.rte.ie/news/2008/1002/economy.html