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It may take generations to pay for bankers’ greed

THERE is an old saying in business: when you owe the bank €100,000, you worry, but when you owe them €10 million, they worry.

The logic of course is that the deeper into the bank vault you go, the more the tail wags the dog.

The situation presupposes no morals on either side and while it is self-perpetuating, it is not sustainable in the long run.

So in the tradition of ‘what goes around comes around’, the latest free market adjustments have brought the whole vicious circle crashing down. It was bound to happen and could not have been unexpected.

The major banks were selling their own property portfolios two years ago at the height of inflated market values (and leasing them back from the proud new owners to whom they lent the money for the purchase). This asset-stripping ensured they had little of value on their books when the crunch came other than debts owed to them that might never be realised. The banks themselves were expecting a day of reckoning even back then.

What was unexpected, however, was the Government underwriting the banks.

Put simply, a tiny minority of self-chosen individuals played hard and fast with huge sums of money to create and drive a property frenzy which badly affected the poorer majority.

In response to this travesty, our elected leaders have sent a message to the rich and powerful that they can keep their ill-gotten gains, their jobs are secure and those least able to do so will pay for a mess which is not of their own making. The possible figure of €50 billion that the Government has promised on your behalf will become a loan when the first bank fails (and the rest come tumbling down).

You, your children and your grandchildren will be repaying that loan through taxes of all kinds for many years to come.

You did not apply for the loan, you did not get the money, you have nothing to show for it, but you will have to honour the payment schedule regardless.

It’s ironic now to remember that the reason most people voted Fianna Fáil in the past was because of their belief in that party’s ability to handle the economy well.

John Mallon

Shamrock Lawn

Mayfield

Cork


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