Two-tier Anglo bank cheaper than NAMA

Monday, March 22, 2010

FINANANCE Minister Brian Lenihan’s over-reaction to the property crash, in giving blanket cover to the banks and then bolstering them with billions of taxpayers’ money, was a questionable decision.

It’s all too obvious now ... if we had a free and independent government in September 2008 it would have nationalised the leading banks, taken full control of all debt, reconsidered NAMA and avoided the current mess.

When operating viably in the future, the banks, hopefully, would be returned to "the markets".

The set-up costs of NAMA could have been avoided by creating a two-tier bank in the up-and-running, first nationalised and biggest debtor – Anglo-Irish. One section would handle all toxic debt, similar to NAMA, while the other was being reincarnated to enable it to operate as a regular bank.

Instead the Government chose to go on capitalising these avaricious, incompetent institutions with endless billions of taxpayers’ money.

Where is it? The banks are still not functioning or making any effort to appease a cash-starved economy rearing to get off the ground.

AIB’s annual report said it all. The former giant, €2m-a-day profiteer has now come out of its smokescreen a virtual pauper, with an unprecedented annual loss of €2.3bn, or more than €6m a day, on a reputedly dodgy €38bn loan book. Yes, humbly acknowledging their loss and, despite the billions received in state financing, their hands are out once more looking for higher interest from ordinary borrowers already up to their tonsils in debt.

You just wonder what form of wheeling and dealing will occur in pursuing the real toxic debt.

James Gleeson
‘The Grove’
Turtulla
Thurles
Co Tipperary

This appeared in the printed version of the Irish Examiner Monday, March 22, 2010