The nightmare facing Irish taxpayers

Understandably, all attention will be on today’s hair shirt budget but believe me it is a minor event in comparison to the following statement from the CEO of the Financial Regulator, Patrick Neary, to the Joint Oireachtas Committee on Economic Regulatory Affairs (RTE News, 1st report).

“The six Irish banks covered by the (guarantee) scheme have a total regulatory capital base of €42 billion. This figure takes account of provisions of €2.1 billion against impaired loans totally €3.6 billion. Speculative lending to construction and property development in Ireland amounts to €39.1 billion of which €24 billion is supported by additional collateral or alternative sources of cash flow and realisable security. This leaves a balance of €15 billion secured directly on the underlying property.”

This, in effect, means that the six banks in question are insolvent and will have to be bailed out by the taxpayer.

The €15 billion that Neary mentioned is only a minimum estimate of the massive bill facing Irish taxpayers. It is very likely that at least a portion of the €24 billion allegedly supported by ‘additional collateral or alternative sources of cash flow and realisable security’ will also prove to be lost money recklessly loaned out by greedy bankers.

Neither did Neary make any mention of taxpayer’s exposure as a result of the extended government guarantee to a number of non Irish banks last week.

Irish taxpayer’s could be facing a bill of between €20 and €25 billion.

Here’s what the so called Financial Regulator is going to do in response to the disaster.

“We will immediately recruit an additional 20 senior supervisory staff with banking experience to be placed on site (pun, I assume, not intended) in key banks to monitor developments. We are now requiring banks to set out new business plans focusing on the need to reduce their risk profile and how their models of banking are sustainable in the new environment. There will be enhanced reporting obligations in relation to capital, asset quality and individual large loans to supplement our daily liquidity reporting requirements.”

This, of course, is pure bullshit. What’s the point of requiring banks that are now insolvent because of their reckless greed to focus on their need to reduce risk?

It is, of course, no accident that Neary announced the full extent of the nightmare facing Irish taxpayers on hair shirt budget day. He’s using the event as a means of covering up his own incompetence.

But then again he’s only following the example of the Government who are hiding behind the global financial crisis to cover up the crucial part they played in allowing bankers and property speculators to destroy the economy.

Neary on Prime Time recently:

4 thoughts on “The nightmare facing Irish taxpayers”

  1. I highly recommend to all that you read, “The Creature from Jekyll Island” by Edward Griffin. This book tells all you need to know about the USA Federal Reserve and the Global Banking System. Taxpayer bail out of the bank system has been on the agenda since a secret meeting of the richest bankers in the world took place on Jekyll Island, incidentally owned by the Rothchilds, back in 1910.

  2. This gives me an excuse to give the following Opinion Piece by Dan O’Brien in today’s (17/10/08 Irish Times some prominence.

    I carry no brief for O’Brien but he articulates a view I have held for some time. However, apropos Anthony’s view above, any legislation setting up the proposed new agencies would need to be watertight to provide for the utmost transparency and accountability as well as ensuring that no trace of cronyism would apply in the appointment of CEO’s to such agencies.

  3. Anthony, I would be grateful if you corrected my typo in my last comment. ie. (117/10/08 should read (17/10/08). Regrettably there is no edit facility for comments.

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