Don’t nationalise the banks

THERE seems to be a persistent campaign, particularly by the media, for nationalisation of the two main banks.

While corrective action within the banking system was clearly needed and has already been partly taken, the idea of handing control of AIB and BoI to some organ of the Department of Finance is ludicrous.

The Department of Finance, and especially the Central Bank and the Financial Regulator, have served this country extremely poorly during the lead-up to the financial crisis.

The kindest explanation would be that “they were asleep on their watch” and totally failed to take any corrective action before things got out of hand.

In recent years, the department has got its budgetary predictions spectacularly wrong.

In general, the state should not involve itself in commercial activity for the very good reason that it tends to do it badly and such enterprises will be subject to endless interference by venal politicians — it would be no different with the banks.

By all means root out the corrupt and incompetent bankers who have caused most of the damage, but then permit the banks to recover commercially under changed management.

In time, the state should be able to recoup the public funds used to prop up the banks.

Allowing for the fact that this state equity has been acquired at “fire escape” prices, there should be the prospect of a reasonable profit over time.

After all, recent attempts to portray the country and the banking sector as basket cases are not justified.

David Roberts

‘Gloundine’

Castlegrove

Mallow

Co Cork