Can we trust FG and labour with the banks?

[simonj]

The lack of alternatives in the forthcoming general election is disheartning to say the least.

Let us not forget, however, that the Past is Prologue

Fianna Fail and their Green lackeys are the current bad boys.

However, the lack of banking regulation and oversight should have been repaired by successive Governments involving all three major parties who have all had ample opportunity to do this since 1985.

FG and Labour went into coalition in 1982.
In 1985 AIB purchased ICI - the insurance company of Ireland - who gave out policies on things like bloodstock, satelites and buildings in earthquake prone zones, very high risk sectors.

ICI, however, did not cover its reserves (sound familiar?)

ICI then had liabilities that the AIB group could not cover, and AIB in a most astute manner went to the government - holding an economic gun to their head with threats of systemic failure through the entire banking system.

We are still paying for this bail out, as some policies will not expire until 2050.

From this, the banks learnt that the threat of being too big to fail would panic Governments into writing open and unending cheques - just like the bank garuantee.

In more recent times the FF/Green government received shares of €3.5bn in AIB in 2009 to recapitalise the bank.

The Irish State had been due to receive dividends on those shares, but in typical FF/Green incompetence they overlooked the fact that EU regulations state that banks that get State aid cannot make cash payments.
This forced AIB to give the government shares instead.

It is due to this, in making the situation worse, that any bank failure will present major costs to the Irish taxpayer.

[eoinmn]

Not while FG and Labour are taking political donations from the banks, no.

[simonj]

Thge fact of the matter is as the shareholder, to try and recouperate some of the money invested in AIB, sales should be made of AIB assets like US and Polish/eastern european share holdings.
If the Government could not recieve money from it, at least it would lessen the tax holders burden

[Captain Con O'Sullivan]

To answer the OP no I see no reason why FG and Labour would be any less led by the nose by banks.

In fairness if Germany can be fooled by the banks given their tighter history of regulation over that financial sector I see nothing in FG or Labour in Ireland that would indicate any control over Irish banks.

As long as the IFSC is a low regulatory and low tax sector which enables European banks subsidiaries to take massive gambles via the IFSC, as long as Irish politicians swallow whole the lobbying of this sector and as long as the IFSC is regarded as 'systemic' to the Irish economy there is not a hope in hell that FG or Labour can hope to control them in any meaningful regulatory fashion.

And I have absolutely no doubt in my mind that the senior leadership in FG and Labour know this full well.

The banks will not be controlled by Irish politicians. At this stage it would take the G20 or United Nations to introduce proper global regulation for the banks and bearing in mind I have read through the consultation process on regulation in exactly this sector under Commissioner McCreevy in Europe I can assure you that bank lobbying stands every chance of resisting even international and global regulation.

The banks have been out of regulatory control for quite some time- at least a decade or more.

[simonj]

Personally, I feel with the holdings that the state holds in the banks Amhran Nua could push for an enquiry into who is actually responsible for the debacle, and use that voting power to change the board of gouvernance on the banks.

I think the person best suited to chairing such an enquiry would be Sen Shane Ross

[Sidewinder]

We should just ditch all the legacy establishment parties. If the next Dáil was full of SF, Amhran Nua, progressive independents, etc. we might have a chance of getting somewhere.

Remember those that tell you "there is no choice, you must vote for FF/FG/Lab" are the very same people that told you there was "no alternative" to Bertie, Nice, Lisbon, the Guarantee, NAMA......

[TotalMayhem]

Can we trust FG and labour with the banks?

Abolutely, they will do everything in their 'power' (vested in them by the International Monetary Fund) to please the markets.

[Captain Con O'Sullivan]

We should just ditch all the legacy establishment parties. If the next Dáil was full of SF, Amhran Nua, progressive independents, etc. we might have a chance of getting somewhere.

Remember those that tell you "there is no choice, you must vote for FF/FG/Lab" are the very same people that told you there was "no alternative" to Bertie, Nice, Lisbon, the Guarantee, NAMA......

Its an interesting point in that democracy would be better served and issues debated in more detail I feel.

so much of Irish parliamentary democracy has been just pigfarmers on the make, sales reps stealing expenses and a dull distant fart from a long expired civil war.

[simonj]

Just to note on the shares issue, matt over in the economics section made a very disturbing point

http://online.wsj.com/article/BT-CO-...23-704999.html
http://www.dailymail.co.uk/news/arti...=feeds-newsxml

What are the implications of today's 20 -30% drop in bank shares ?

British bank shares are seemingly being affected

'Experts have warned that the joint European and International Monetary Fund bailout package might have to be postponed, threatening the stability of the entire eurozone, after a snap general election was called in Ireland'
- Daily Mail waffle ?
'Korean shelling, Irish condition add to market jitters'- http://www.reuters.com/article/idUSLDE6AM0O020101123 ; we could become a footnote in the history of much greater events...

And for a layman like me, what happens when shares hit micro-levels ?