Following on from last night’s news that the Irish Government have decided to nationalise Anglo Irish Bank Mick Fealty of Slugger O’Toole got Michael Taft, of Notes on the Front blog, and Irish Left Review, Stephen Kinsella, Economics Lecturer in UL, blogger and recent ILR contributor and Gerald O’Neill, an economist who also blogs at Turbulence Ahead to try and calm the nerves of the online nation.
Mick tells us that the contributors came to the joint conclusion that the government should:
…let [Anglo Irish] collect all the toxic assets of the other Irish banks, then tow ‘out to sea’ and sink it in a box for thirty years and then deal with it when this current economic cycle is a mere detail of modern Irish history…
To listen to the interview click the Play button above or visit BlogTalkRadio here.
Mick also supplies the key quotes:
“Yesterday the shares were trading at 22 cent when they were stopped, which means the markets where essentially valuing Anglo Irish on the value of its computers and buildings”
“Whatever the process, whether through an instrumental nationalisation or niot, it is clear that the State has to step in, and actually reconfigure the banking architecture. We need to have one bank which is public ownership. There are five other banks that should be collapse into two, so that we have two strong healthy banks. The dubious assets that are going to drag down these banks and raise the possibility of a Japanese, Zombie Bank system for years to come, those should be put into Anglo Irish; a bad bank, a bad debt depository. And then as a next step a third public enterprise banking system should be established on the model of the United States’ Community Development Banks; a third force in retail banking. But we need to bite the bullet and do this up front, otherwise we are just going to get a drip, drip, drip of capitalising banks of which we have very little knowledge about the state of their balance sheets.”
“I have some sympathy with the Minister of Finance. It’s like defusing a bomb when you are not sure whether to cut the red wire, the green wire or the blue wire. You’ve not just got a banking crisis here, you’ve got a property bubble that’s imploding. So you’ve got a number of these huge uncertainties to manage; each of them capable of triggering an explosion in the economy. It is phase one. We need to sort the banks as a first phase and then get to the real economy afterwards.”
Photo of Donal O’Connell addressing shareholds at Anglo’s AGM in the Mansion House, Dublin today courtesy of the Irish Times.
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