Emergency legislation introduced to underwrite Irish banks

national | anti-capitalism | news report

Tuesday September 30, 2008 16:30

by S.Cat

Dublin man decides not to bother paying off credit card

The Leinster House Government has announced its intention to guarantee all deposits and borrowings for the six Irish-owned financial institutions for the next two years.

The list is as follows: Allied Irish Bank, Anglo Irish Bank, Bank of Ireland, Irish Life & Permanent, Irish Nationwide Building Society and the EBS.

Minister for Finance Brian Lenihan has been giving interviews to the corporate media all day to explain why this is a good idea. He says all deposits and debt will be covered by the State.

sychronicity- this book was bought from a charity shop window in Dublin today

Today's Dáil schedule has been rearranged to allow for the introduction of emergency legislation covering the guarantee to be introcuced at 6PM.

This guarantee is a being seen as a rather desperate move to fend off short selling of bank stocks. It covers all money borrowed from other financial institutions. Some Irish lending institutions have become notorious for over lending, that is, letting people borrow money to buy property and cars that it is unlikely they will be able to pay back.

As long as property prices kept rising, the banks thought they would be fine in the long run. Anyone with an ounce of sense would have realised that prices could not keep rising forever, and that if you lend people money that they can't possibly repay, you are eventually going to get burned. But since the banks are run by people whose qualifications amount to going to a school where rugby was played instead of hurling, no one noticed.

On a personal note, I lent money to some friends of mine last Friday night in the pub, on the understanding that they would pay me back sometime in the future. In the sober light of day, I now realise that this might not have been such a good idea, and they will almost certainly not pay me back. Since the money I was using was borrowed (from my credit card company) then I'm in a bit of trouble. However, now the government has guaranteed to pay off the debt for me. So that's okay then. Thanks Brian!

The European Commission has said it would study details of the decision to see whether the move complied with EU competition rules.