Irish Banks Approach Armageddon

eeja

Share prices of the three major Irish banks are collapsing with Anglo Irish below 50 eurocents, Bank of Ireland around one euro and Allied Irish just approaching 2 euro.
Are our savings really safe ie how will the Irish government honour their guarantee and how long will it take to refund our savings ?

gunnaknow

What does the share price have to do with whether the banks fail or not? I was under the impression that they would fail when they ran out of money and couldn't pay off their debts when they were due. I didn't think that a drop in share price affected a bank's ability to function.

MiserlyMartin

gunnaknow wrote: »

I didn't think that a drop in share price affected a bank's ability to function.

Neither did customers of HBOS!

cos69

eeja wrote: »

...... Are our savings really safe ie how will the Irish government honour their guarantee and how long will it take to refund our savings ?

Best thing you can do is review all the threads upto September 2008 on saving with Icelandic banks. Similar situation in Ireland one suspects, and your likely to get the same assurances that people with Icesave and KE got. If your worried, get your money out now and sleep easy

eeja

cos69 wrote: »

Best thing you can do is review all the threads upto September 2008 on saving with Icelandic banks. Similar situation in Ireland one suspects, and your likely to get the same assurances that people with Icesave and KE got. If your worried, get your money out now and sleep easy

Good suggestion but unfortunately we cannot really do that with fixed deposits because 1. a heavy penalty most likely payable and 2. who will give up an interest rate of 7.2 percent for one of pehaps 4 percent if one's lucky ?
The loss to many of us Anglo investors is just too great.

Old_Slaphead

gunnaknow wrote: »

What does the share price have to do with whether the banks fail or not? I was under the impression that they would fail when they ran out of money and couldn't pay off their debts when they were due. I didn't think that a drop in share price affected a bank's ability to function.

It's a confidence thing. You don't get too many banks failing when their shareprices are at all time highs.

Low share price usually means there's summat wrong - ie bank has funding problems

ed123_2

...the share price today was down 30% with various companies (hedge funds?) shorting the shares. However they have just produced their results to 30th sept 2008 large write downs re property development loans however they are still in profit all be it less than half previous financial year was it approx 570 million euros with similar profit levels for the next few years. I must admitted this share price is dropping like a stone...as to wither the shorters can actually bring down a company I don't know...?

soulsaver

Anglo Irish haven't burnt bridges with the Irish treasury, so they'll be forced to merge or be bailed in the event...
Of course that assumes that what we've been hearing regarding their preference for private investors over the merger option...is factual.

Rachel_Jones

Am I correct in thinking that Bank of Ireland funds Post Office savings accounts. Does this mean that savings with Post Office are now becoming vulnerable and that guarantees would be with Irish Government rather than UK? Would be most grateful for advice.

soulsaver

Rachel_Jones wrote: »

Am I correct in thinking that Bank of Ireland funds Post Office savings accounts. Does this mean that savings with Post Office are now becoming vulnerable and that guarantees would be with Irish Government rather than UK? Would be most grateful for advice.

Bank Of Ireland is the deposit taker for some of the accounts available at the Post Office, not all. And guarantees in the 1st instance with PO/BoI would be with Irish Govt, so.... pretty safe you'd think - but not tested.
Vulnerable? Bank of Ireland is probably the least vulnerable of the Irish Banks IMHO.

edwinac_2

The City of London's scheme is to engineer the collapse of the Irish banking sector, just as it did with Iceland.

Out of the six main financial institutions in Ireland, only two are likely to remain - the Bank of Ireland and the Allied Irish Bank.

It is no coincidence that both of those banks are controlled from London, and will benefit enormously from the elimination of competition.

The Anglo-Irish is poised to be consolidated by the Bank of Ireland while the Allied Irish will gobble up the Irish Nationwide and the Irish Life & Permanent.

These mergers may even be forced through by the Quisling finance minister, Brian Lenihan, as a favor to the London bankers, whose hedge funds have preyed on the Irish banks for months.

As eeja has already pointed out, this loss of competition is bad news for depositors on both sides of the Irish sea.