Very worrying stop press news re Anglo Irish

masonic

cepheus wrote: »

I opened a bond several years ago on the basis that the bank was at least partially covered by the UK scheme, on the worst case assumption that the Irish scheme may not be able to pay out in full if the country went bankrupt through it's liabilities. If there was any change to this rule, surely by law we should have been told?

If the Irish scheme could not pay out, then you'd stand to lose the part of your money covered by the Irish scheme whether or not the bank is partially covered by the UK scheme. The change was not to the rules, but to the limits of the respective compensation schemes (which ultimately resulted in there being nothing left for the UK scheme to cover). Those changes to the compensation limits were very widely publicised.

Trollfever

Visit Ireland..........

The new Iceland.

bendipa

eeja wrote: »

Sky news just this minute reported that the European Commission has started an investigation into the bank to see if EU rules have been breached.

What is most worrying (even for Gozomark) is that were the EU to rule against Ireland its current cast iron ( note I did not say gilt edged ! ) guarantee on deposits might also fall away. If this happened it is quite possible that the bank would go belly up and depositors would lose their savings.
A frightening prospect indeed.

Let's get a few things straight. The EU are not investigating ANG because they breached EU banking rules. They are determining whether nationalisation would provide unfair banking competition for the other Irish banks. The reason for this is that nationalisation provides full unlimited guarantee by the Irish government indefinitely compared to the 2 year rule for the other Irish banks currently in force.

Basically, ANG has no alternative but to nationalise or go broke, and I can't see how the EU can refuse it without putting depositors and savers at serious risk, which would be financial suicide for ANG, the other banks and Irish government They didn't refuse when NRK were nationalised, so how can the EU refuse it in ANG's case?

Secondly, ANG is not another IceSave case. Iceland are not a member of the EU, whereas Ireland is, and therefore is entitled to emergency backing from the ECB if all else fails. It could possibly spell the death knell of the EU itself if they ever refused to back another member country such as Ireland, since one of the main functions of the ECB is to be lender of last resort to a member country. I mean how could the EU ever be trusted if a member country hits the ropes and they refused aid?

http://www.google.com/hostednews/ap/article/ALeqM5h5ZIZnZq1zCMkJ5TxsMaG_mjgkOQD95O6M200

sabretoothtigger

Trollfever wrote: »

Visit Ireland..........

The new Iceland.

Another iceage vs global warming

Andrew64

It seems to me that the only thing that's stopping Ireland doing an Iceland is its membership of the Euro.

Help Ireland or it will exit euro, economist warns

http://www.telegraph.co.uk/finance/globalbusiness/4285331/Help-Ireland-or-it-will-exit-euro-economist-warns.html

This is a minority view, but if Ireland made this threat, the ECB would likely call their bluff!

cepheus

masonic wrote: »

If the Irish scheme could not pay out, then you'd stand to lose the part of your money covered by the Irish scheme whether or not the bank is partially covered by the UK scheme. The change was not to the rules, but to the limits of the respective compensation schemes (which ultimately resulted in there being nothing left for the UK scheme to cover). Those changes to the compensation limits were very widely publicised.

This sounds like legal terminology manipulation. What investors really want to know is if they are covered by an reputable body with large assets to cover any shortfall, if this situation was changed they should have been explicitly warned.

It's like being told that your Zimbabwe bank account is covered by the UK government, then because President Mugabe decides to increase the (worthless) theoretical compensation limit, suddenly the UK is exempt from any liability! If we could all pass on risk and liability to a worthless bankrupt we would be laughing. The financial system has got a bad enough reputation as it is, this sort of thing totally undermines the credibility of the banking system whether it is is EU rules or not which is to blame.

gozomark

cepheus wrote: »

This sounds like legal terminology manipulation. What investors really want to know is if they are covered by an reputable body with large assets to cover any shortfall, if this situation was changed they should have been explicitly warned.
.

If it all goes bellyup, neither the Irish nor the UK taxpayer are big enough to cover any shortfall, so no guarantee is 100%. Who is to say a guarantee with the Irish, with ECB banking, is less safe than the UK ? As a result, how can you prove you have less protection than before

masonic

cepheus wrote: »

This sounds like legal terminology manipulation. What investors really want to know is if they are covered by an reputable body with large assets to cover any shortfall, if this situation was changed they should have been explicitly warned.

Do you really expect that every time a Government makes a change to policy that adversely affects some people, they should explicitly warn all of those people personally? That just isn't practical. What happened was that the change was widely publicised in the national media. That is all that normally happens and all most people would expect.

baby_boomer

metrobus wrote: »

Only time, the EU are just waiting to punish the Irish for the veto.

Good point mb :rotfl:Our Euro "friends" have long memories.

cepheus

masonic wrote: »

Do you really expect that every time a Government makes a change to policy that adversely affects some people, they should explicitly warn all of those people personally? That just isn't practical. What happened was that the change was widely publicised in the national media. That is all that normally happens and all most people would expect.

The banks seem to waste a lot of paper providing useless information we don't want, or already know. Why not send us something we need to know such that the underwriter is now the Irish government rather than a combination of UK + Ireland? Perhaps the regulator should require them to do this, it isn't unreasonable.

My understanding is that the Irish Banks liabilities far exceed that of Ireland's abilities to pay, much more so than with the UK situation.