Let’s burn the deadwood banks

WHEN the blanket guarantee to the banks expires in September, could the Government then extend it to functioning banks and exclude the dead ones like Anglo Irish and Irish Nationwide Building Society.

Would foreign investors and those with influence in such matters punish us for commonsense?

The word “systemic” has been bandied about with regard to these rogue institutions. Surely if there is a cancer within a system the wise thing to do is to cut it out as it is contaminating the healthy parts.

The US system did not collapse when Lehman Brothers was cast adrift. We admire the USA’s decisiveness in such matters. Let’s agree that the blanket guarantee of September 2008 was given in good faith.

It is no bad thing to change a decision on mature reflection. It was flawed, so let’s say, “got it partially wrong — now putting it right”.

While there would be hits for those bondholders, etc, who bet on Anglo Irish, those other investors, far from being frightened by the wise move of jettisoning dead banks, would see us as wiser now and capable of hard decisions, thus increasing confidence in future investment in our institutions and state newly restored to good health.

Whether the European Central Bank or bondholders, or any such body or group, would be upset by dropping government support for the rogue institutions, we should be brave enough to go our own way and let ordinary people regain some modicum of confidence that the Government is more concerned with their fate than that of the masters of the universe who invested so unwisely. Surely if you bet, you must be prepared to lose. The bondholders, investors, etc, gambled and lost. It’s called capitalism.

Joe Heffernan

Glenside

Boherbue

Mallow

Co Cork