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THERE is a campaign afoot to ‘liberalise’ Ireland’s bankruptcy laws, led by Dermot Ahern and Willie O’Dea (both FF) and Deirdre Clune (FG).
Bankruptcy is a legally declared inability of an individual or organisation to pay its creditors.
The bankruptcy system is an important protection for national and international economic systems and provides some protection for individuals from reckless or corrupt traders and imposes some sanctions on those who cannot pay their debts.
In ancient Greece a debtor’s family could be sold into slavery to enable creditors to recoup their losses and Genghis Khan imposed the death penalty in some such cases – a little harsh perhaps. In recent centuries bankruptcy laws have tended to protect the bankrupt more than their victims.
Arguably, modern bankruptcy and insolvency laws are far too lenient, given the recklessness of so many bankers and developers, and the recklessness of governments and regulators in many countries, especially Ireland.
Here restrictions are imposed on persons who are declared bankrupt for 12 years. FF and FG are now proposing that this be reduced to six years, thereby letting their developer friends and financiers off the hook far too soon and exposing the vast majority of prudent Irish citizens and taxpayers to further risks. The irresponsible banks, especially Anglo Irish, should have been left to succumb to the bankruptcy system, which is the internationally accepted system for dealing with reckless trading. The Government has bailed out not only the failed banks, but also many of the reckless builders and developers at taxpayers’ expense and, in so doing, has effectively corrupted the regulatory controls of the bankruptcy system.
It has provided inadequate protection for the taxpayer from corrupt developers and others who may have transferred assets offshore while abusing the bankruptcy system to evade their liabilities within Ireland.
Those primarily responsible for the Irish financial crisis are, first, the Government and politicians who failed to govern in the people’s interests; second, the financial institutions and regulators and, third, the developers and builders.
I propose a campaign to increase sanctions and impose accountability on reckless traders, reckless regulators and reckless politicians, and let’s begin by opposing any relaxation of the bankruptcy laws.
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