It was only a matter of time before the Irish banking sector was forced to make a move on the growing sub prime crisis.
The headline in this morning’s Irish Independent “Banking chiefs seek ‘dig-out’ from taxpayers” leaves us in no doubt as to who they think should pay to get them out of the mess.
Richie Boucher, the chief executive of Research Financial Services Ireland wants long term funding to the banks to be “provided domestically” by taxpayer’s.
Why domestically? Well, Boucher explains that it wouldn’t be prudent to be ‘overly reliant’ on the European Central Bank for borrowings.
What he really means, I suspect, is that the ECB would impose strict conditions and demand accountability for any rescue package whereas Irish politicians can be pressurised into handing over taxpayer’s money without the need for all that awkward repayment and accountability stuff.
People should be aware that under The European Communities (Deposit Guarantee Schemes) Regulations, 1995, in the event of a bank failing, the maximum amount payable to any depositor is 90 per cent. of the aggregate deposits held by that depositor subject to a maximum compensation payment of €20,000. Thus, a depositor with a deposit account totalling €5,000 would receive compensation of €4,500 while a depositor with deposits of €22,222 or more would receive the maximum compensation of €20,000.
see http://www.financialregulator.ie/frame_main.asp?pg=/industry/in_car_intr.asp&nv=/industry/in_nav.asp