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Thread: Banking Collapse Reports Out - Regling & Watson and Honohan - Link Here at 4.30 p.m.

  1. #106
    Join Date
    Apr 2010

    Default Re: Banking Collapse Reports Out - Regling & Watson and Honohan - Link Here at 4.30 p.m.

    Quote Originally Posted by C. Flower View Post
    Here are the Honohan (Central Bank) Report and the Regling and Watson Reports.

    Interesting to note that the Quinn Contracts for Difference affair is not covered at all by either of them, the Honohan Report saying that the matter is not covered as it is a subject of a separate investigation. It appears that the ODCE and Garda Fraud Squad investigations have successfully removed the issue from public view.
    It's strange re CFD issue not being addressed at all by any of these parties. Are they passing the buck around which they deny it isn't their job to investigate this issue.

    At the moment, i am reading O Toole's book ' Ship for fools'?

    What came up a lot was IFSC and Defra Bank & also the issue of unregulation in the Financial services industry such as IFSC. Me thinks it's a time bomb waiting to go off there (IFSC). No wonder the Germans were mightly pissed off with this one.

  2. #107
    Join Date
    Mar 2010

    Default Re: Banking Collapse Reports Out - Regling & Watson and Honohan - Link Here at 4.30 p.m.

    Some very interesting information obtained by Pearse Doherty on the payments made to the authors of the banking reports:
    Notable also that that the contract for the Regling/Watson report was never put out to tender and that both of them were instead appointed by Brian Lenihan.
    Klaus Regling is now the head of the EFSF
    UK consultant Max Watson was paid 50pc more for his work on the famed Regling/Watson banking report than his German co-author Klaus Regling, the Irish Independent has learned.
    New figures show that the Government spent close to €100,000 on the 2010 duo's report, which exposed major financial regulation failings during the boom and also criticised the Government for failing to rein in bank lending

  3. #108
    Join Date
    Mar 2010
    heart of Europe

    Default Re: Banking Collapse Reports Out - Regling & Watson and Honohan - Link Here at 4.30 p.m.

    Honor an found his memory

    Senior European and European Central Bank (ECB) officials agreed to threaten Ireland with national bankruptcy if the government made any attempt to burn bondholders, the Sunday Independent can reveal.

    The threat was made at a high-level teleconference meeting, details of which have been revealed for the first time by the Central Bank governor, Dr Patrick Honohan.
    - See more at:
    Of course the dead guy's memory will never be tested to see if Paddy's memory is correct

    "The Troika staff told Brian in categorical terms that burning the bondholders would mean no programme and, accordingly, could not be countenanced," Dr Honohan writes. "For whatever reason, they waited until after this showdown to inform me of this decision, which had apparently been taken at a very high-level teleconference to which no Irish representative was invited." - See more
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

  4. #109
    Join Date
    Feb 2010

    Default Re: Banking Collapse Reports Out - Regling & Watson and Honohan - Link Here at 4.30 p.m.

    Quote Originally Posted by DCon View Post
    Honor an found his memory

    Of course the dead guy's memory will never be tested to see if Paddy's memory is correct
    The Indo is suggesting it was the Troika (not the ECB) who blocked bondholder burning. That includes the US (IMF).
    Yesterday on the Marian Finucane show, Ollie Rehn was pressed over the possibility that the ECB had acted beyond its powers. Note that the article says Irish officials opposed the extent of the loans as in their view Ireland would not be able to pay them back.

    Brian Lenihan knew well that September 2010 was going to be a testing month for the Irish banks, as they would have their work cut out to persuade lenders and depositors to rollover the large block of bank claims maturing in the last weeks of the original guarantee (which had been for two years only and, therefore, was due to expire at the end of September).
    All of official Dublin knew that it was highly unlikely that a rollover would be successfully accomplished, leaving Anglo and, indeed, potentially other banks dependent on the Central Bank's Emergency Liquidity Assistance.
    Already at the end of July, I had taken care to make the ECB fully aware of how this situation was shaping up, knowing that they would be uneasy about the prospect, as ELA is supposed to be a short-term facility. Nevertheless, it was the inexorable growth in ELA from the middle of September that would induce ECB staff and Council to press for Ireland's application for a programme of official financial assistance (ie. a bailout).
    For a hammer, every problem is a nail, and most external official observers held fiscal hammers and assumed that fiscal tightening was the sole and necessary solution to the emerging Irish problem. By mid-September, Brian acknowledged that more fiscal action was going to be needed, even if it took several more weeks before official Dublin converged on a level of adjustment which would see the government's finances restored to a safe path. But fiscal adjustment was never going to solve the banks' problem if their funding continued to drain away.
    While Brian fought a rear-guard battle against European fiscal hawks, in particular, resisting their pressure for an early budget, the Central Bank worked to persuade international colleagues to desist from market-destabilising statements that continued to fuel the deposit drain.
    At the early-October IMF annual meetings, planning for a possible Irish funding application was already under way. At meetings with IMF officials, Brian asked what sort of conditions might a loan application entail and was reassured, by the tone conveyed by those on the other side - who would soon form the nucleus of the IMF Troika team for Ireland - and by their message, that the existing thrust of announced Irish fiscal and financial policy was broadly consistent with what would likely materialise. Still far from ready to make such an application, it seemed that Brian had mentally crossed a barrier.
    In terms of market confidence, the die was cast by the Merkel-Sarkozy announcement on October 18 at Deauville to the effect that the holders of European government debt would have to contribute to any bailout. As the financial markets absorbed the implications of this new policy, interest rates on all peripheral government debt, but especially Ireland - now clearly seen as next-in-line for a bailout - jumped to insupportable levels. Now, Irish companies and individuals joined the external investors in removing their funds from the Irish banking system and the need for the protection of official external assistance became acute. Public and semi-public statements and briefings by senior Eurozone officials to that effect added fuel to the fire.
    By Thursday, November 4, as the government announced the outline of its revised four-year budgetary plan, it was clear to Brian's Irish advisers that the game was likely up, and it did not take them long to convince Brian that it was time to talk to the Troika. I spoke to the relevant officials at the IMF and ECB and it was suggested that an early meeting be held in Brussels to see what might be available in the way of financial assistance.
    By the middle of the following week, Brian had agreed that officials would conduct pre-negotiations on a programme - preferably precautionary in character. The IMF complained that it preferred to have a definite request before embarking on costly negotiations, but eventually agreed to proceed as if there had been a formal application. It was decided to hold the discussions in Brussels, as Brian did not want to have teams of negotiators in Dublin. The meeting was set for Sunday, November 14, and almost all of the 17-strong Irish team, led by the Department of Finance, flew over that morning.
    Officials from the three agencies that made up the Troika had pre-negotiated, between themselves, much of what they had in mind, but their style in these initial negotiations with the Irish side was not to present demands, but instead to lay out what was legally possible in the terms of loans and the scale of financing they envisaged.
    There were no surprises about the priorities. Fixing the banks and guaranteeing the fiscal adjustment were at the core of the Troika's agenda.
    The scale of the loan envisaged was even higher than we, on the Irish side, had anticipated, partly because the Troika wanted to provide for the eventuality of a very large capitalisation of the banks to a level which Irish officials thought would threaten debt sustainability of the sovereign. The Troika insisted, though, on two points: first, discussions could not go much further without a formal application, and second, the idea of a purely precautionary programme was out of the question.
    Brian Lenihan was briefed by his officials on the two days of negotiations and was sufficiently convinced to agree that the negotiations should continue in Dublin on Thursday, November 18. Meanwhile, he came under much pressure from alarmed fellow ministers in the Eurogroup meeting on the Tuesday to make a formal application there and then.
    I, too, was asked on Wednesday evening to let the Irish government know that the ECB Governing Council also wanted Ireland to apply in order to steady financial markets. I duly passed on the message by phone, but got a cross response from Brian, who rightly felt that all of the external actors were seeking to bounce him into formally making the application. He said he had no government approval to do so, but did not at all suggest that he was having second thoughts about the course that he had embarked upon. Instead, I assumed that he wanted to exploit the fact that no formal application had been made as a lever in the negotiations, which were scheduled to begin very visibly the following morning.
    Noting the bewilderment evidenced in the European official circles, I became increasingly concerned that the financial market pressures, including the huge outflows from the banks, would cause lasting damage to the Irish economy.
    Towards midnight that Wednesday, as the meeting I was attending broke up, I sounded out Frankfurt colleagues on whether they would support a statement by me indicating that the ECB was standing behind the Irish banking system, but in vain. Already, the following day's editorial in the Financial Times had appeared online, speaking of a bank run in Ireland.
    Things had got to the point where, had it remained silent on the state of play, the Central Bank would have not only failed in its responsibility to use timely communication to steady confidence, but would also have dashed a legitimate public expectation in Ireland that it could be trusted not to deceive through omission.
    Fortunately, this could be avoided, despite the lack of any application from Ireland for assistance. Thus, though by now all on the Irish side regarded a programme as inevitable and Brian's earlier hope that it could be a merely precautionary arrangement had now all but vanished, I made a point of explicitly leaving these two aspects -whether an application would be made and the possibility of a precautionary-only arrangement - open in the radio interview I undertook the following morning (Morning Ireland, Thursday, November 18).
    The Troika remained in doubt about the government's intentions and the interview, if anything, improved the negotiating atmosphere somewhat to our advantage. What had not occurred to me was that Brian might not, even by that stage, have communicated to some of his senior ministerial colleagues how far down the road the discussions had already gone. Clearly, the interview was inconvenient for him, but he understood, as he confirmed to me then and later, that my sole aim was to work in the national interest.
    Despite all this, the ECB - still not fully convinced that an application would be made - felt it necessary to write to Brian the following day, warning that continued emergency lending by the Central Bank to the Irish banks could not be assured unless there were to be an application.
    - See more at:
    Last edited by C. Flower; 28-09-2014 at 11:35 AM.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

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