Should Irish bank bosses say sorry like their UK counterparts have done?

K4t

nipplenuts wrote: »

Where's the point? Apologising won't undo what has been done, so what would be served by it?

Because I honestly believe some of these fellas don't think they were wrong!

gandalf

I saw a suggestion in today's Irish Times letters section that the Banks should hand their art collections over to the state as part of the agreement.

I didn't realise that they held such large portfolios of art. I think this would be a good start that this art be given to the state to allow everyone enjoy it.

http://www.aib.ie/servlet/Satellite?c=CSRContent_C&cid=1177399277610&pagename=CSRPortal%2Fcsr_main

http://www.aib.ie/servlet/BlobServer/The%20AIB%20Collection%20in%20context%20Over%20a%20Century%20of%20Irish%20Art,2.pdf?blobcol=urldata&blobheader=application/pdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1212673414450&csblobid=1141324709936

http://www.bankofireland.com/in_the_community/sponsorships/bank_of_ireland_art_collection/index.html

Also I would be very surprised if the number of 100% mortgages issued in 2006 was 33%, if thats true then it was wreakless in the extreme of the banks. Then again given what has come out in the open its not surprising.

SkepticOne

molloyjh wrote: »

SkepticOne wrote:

I think the main recklessness in the Irish system was continuing to lend into the bubble. No one knew when it was going to turn, this is true, but they should have known that it would turn and taken precautions accordingly. They should have known, for example, that building almost 100K houses a year was not sustainable, yet they chose to introduce 100% mortgages. They paid economists to produce what they must have known were untruths to convince regulators and policy makers that everything was fine.

The question of whether it was recklessness or merely bad judgement is one of degree, but because of their actions - not merely the "sub-prime" banks - we are in a much worse situation than otherwise.

Just a couple of points:

1. The main Irish banks did know the property boom would end and over the last couple of years took steps to ensure that they were well capitalised. Remember all the high profile selling of branches through-out the country. Remember AIB selling their Ballsbridge property? All of this was done to increase the capital the banks had and the timing was no coincidence.

I'm not sure this is the complete story. When 100% mortgages were introduced the central bank increased the capital requirement of banks to back them. The selling of these properties, particularly in the case of BOI, could be seen as meeting this requirement rather than any forsight in the market.

2. 100% mortgages were a great advertising ploy but they were difficult to get. The smaller banks, like Permanent TSB etc, were more likely to provide them. While all banks offered them (and had for years before they were thrust into the limelight) they were reserved for a very small number of people, e.g. doctors who were not yet on their full salary etc, where employment was secure and salary was guaranteed to go up.

It has been pointed out that fully one third of morgage to FTBs in 2006 were 100% LTV. Combine this with the rapid increase in BTL lending, interest only mortgages and long period (40 year) mortgages and we have what I would call reckless lending. It is easy now to forget what was going on then. Of course, when the market turned, suddenly all these "innovative products" are scaled back or withdrawn. Not what you would responsible foresight.

3. Other than some of this messing with Anglo and Irish Life I don't know of any banks who misled the regulator. To do so is illegal and would mean serious consequences for the bank(s).

You also need to add Irish Nationwide's hiding of Sean Fitzpatricks loan to this. But what I was talking about was misleading propaganda put out by economists employed by the banks rather than illegal hinding of information. I believe the banks themselves did not fully believe what their economists were putting out although it did cloud their minds.

The question is, should the banks themselves be held accountable for this or should it be those appointed to regulate them?

molloyjh

SkepticOne wrote: »

I'm not sure this is the complete story. When 100% mortgages were introduced the central bank increased the capital requirement of banks to back them. The selling of these properties, particularly in the case of BOI, could be seen as meeting this requirement rather than any forsight in the market.

It has been pointed out that fully one third of morgage to FTBs in 2006 were 100% LTV. Combine this with the rapid increase in BTL lending, interest only mortgages and long period (40 year) mortgages and we have what I would call reckless lending. It is easy now to forget what was going on then. Of course, when the market turned, suddenly all these "innovative products" are scaled back or withdrawn. Not what you would responsible foresight.

Well I suppose it could be. I'd be curious to see a source for this 100% mortgage figure as it seems staggeringly high to me. I would also be curious to see if there is a break-down of which banks were lending this money.

SkepticOne wrote: »

The question is, should the banks themselves be held accountable for this or should it be those appointed to regulate them?

Why should it be one or the other, and why should "the banks" be taken as a single entity? I would wager that some were more guilty than others and in different ways. Additionally the regulation thing may need to be looked at. It's a grand aul' bandwagon to hop on, but when you think about the realities involved in regulating an industry like the financial industry the task is immense. We need to identify if there really is a fundamental problem with the regulator given that they have only had a couple of years on the job so far. What was done and what wasn't, where were the priorities and all that. There's no point in Lenihan insisting that the regulator needs reform if, for example, the main problem was a resource one.

SkepticOne

molloyjh wrote: »

Well I suppose it could be. I'd be curious to see a source for this 100% mortgage figure as it seems staggeringly high to me. I would also be curious to see if there is a break-down of which banks were lending this money.

http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,15295,en.XLS

The figure you want is in the tab entitled "Ranges of Loans to Value" in cell G50.

Are you now astounded?

Why should it be one or the other, and why should "the banks" be taken as a single entity? I would wager that some were more guilty than others and in different ways. Additionally the regulation thing may need to be looked at. It's a grand aul' bandwagon to hop on, but when you think about the realities involved in regulating an industry like the financial industry the task is immense. We need to identify if there really is a fundamental problem with the regulator given that they have only had a couple of years on the job so far. What was done and what wasn't, where were the priorities and all that. There's no point in Lenihan insisting that the regulator needs reform if, for example, the main problem was a resource one.

I don't think it matters which banks were involved. Whether the madness was spread across all the banks or whether a small number went totally bonkers is not hugely important. What I would like to see is a statement from them to the effect that they collectively require tougher regulation and that in the absence of such regulation they have let the country down.

holly1

They should all be sent to jail,I am so mad the way these people are getting away with robbery,Im so annoyed I cant but words to it.Ohh!!!!!Ch**st but I hope they all DIE a horrible slow death.

stepbar

holly1 wrote: »

They should all be sent to jail,I am so mad the way these people are getting away with robbery,Im so annoyed I cant but words to it.Ohh!!!!!Ch**st but I hope they all DIE a horrible slow death.

Clearly can't put words to it :rolleyes:

holly1

stepbar wrote: »

Clearly can't put words to it :rolleyes:

You must be a Banker:Dif not a wa**er.:rolleyes:

stepbar

holly1 wrote: »

You must be a Banker:Dif not a wa**er.:rolleyes:

OMG I'm so angry!!!! Go away will ya. This is "supposed" to be a serious thread.

gurramok

Good work SkepticOne, could not remember where that file was, bookmarked now for future reference!

It's truely staggering. I did not say 'all mortgages' but 'mortgages' for the English grammar nazi's out there , so yes, the 33% was indeed related to FTB's and 15% related to all everyone who borrowed.

Even interest only stats are amazing, touching 20% in 2007, talk about sheer madness!

That along with the 33% figure for FTB's and the developer loans part, is reckless in my opinion.

SkepticOne

molloyjh wrote: »

We need to identify if there really is a fundamental problem with the regulator given that they have only had a couple of years on the job so far. What was done and what wasn't, where were the priorities and all that. There's no point in Lenihan insisting that the regulator needs reform if, for example, the main problem was a resource one.

My understanding is that they were split off from the central bank. They weren't set up from nothing.

thebman

gandalf wrote: »

I saw a suggestion in today's Irish Times letters section that the Banks should hand their art collections over to the state as part of the agreement.

I didn't realise that they held such large portfolios of art. I think this would be a good start that this art be given to the state to allow everyone enjoy it.

http://www.aib.ie/servlet/Satellite?c=CSRContent_C&cid=1177399277610&pagename=CSRPortal%2Fcsr_main

http://www.aib.ie/servlet/BlobServer/The%20AIB%20Collection%20in%20context%20Over%20a%20Century%20of%20Irish%20Art,2.pdf?blobcol=urldata&blobheader=application/pdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1212673414450&csblobid=1141324709936

http://www.bankofireland.com/in_the_community/sponsorships/bank_of_ireland_art_collection/index.html

Also I would be very surprised if the number of 100% mortgages issued in 2006 was 33%, if thats true then it was wreakless in the extreme of the banks. Then again given what has come out in the open its not surprising.

That's a great idea (art idea). Should definitely happen.

nesf

gandalf wrote: »

Also I would be very surprised if the number of 100% mortgages issued in 2006 was 33%, if thats true then it was wreakless in the extreme of the banks. Then again given what has come out in the open its not surprising.

It was 33% of First Time Buyers Mortgages, not total mortgages.

gandalf

nesf wrote: »

It was 33% of First Time Buyers Mortgages, not total mortgages.

Ah that make sense, still an outrageous percentage of 100% mortgages.

SkepticOne

It would have been quite rare for a second time buyer to take out a 100% mortgage in 2006 since, even doing nothing, they would have built up considerable equity in their first home. So really we're only talking about FTB's here. They have been hit hardest in the banks efforts to keep the bubble going that bit longer.

Daroxtar

nesf wrote: »

It was 33% of First Time Buyers Mortgages, not total mortgages.

Lets not mess around with soft stuff folks, give the kiddies the heroin first. Give it to them all. Get them hooked deep and hard. Then crank up the prices. Tell them there's a shortage and you have to charge more.
But who is to blame, the kids for wanting the smack, or the dealers for giving it to them?
The dealers would probably realise that getting so many kids hooked would destroy their long term trade and reputation and so would show some kind of caution as regards giving full strength gear to everyone who came knocking at the door.
The kids on the other hand would just be lookin to get as mad out of it as everyone else. Kids really dont know whats best for them at all and so should be treated like.. well..kids. Therefore i suppose the responsible ones here would be the dealers.
But thats drugs.

Surely the banks wouldnt decide to give out huge amounts of money to people who had little or no previous experience with the stuff? That would be pretty bad for business in the long term, right? They would surely be aware of what their customers could handle and make sure they didnt give eejits too much just in case..

Should the banks say sorry? yes
Should the criminals be jailed? yes
Should the kids stay the fk away from the junk in future? yes

molloyjh

SkepticOne wrote: »

http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,15295,en.XLS

The figure you want is in the tab entitled "Ranges of Loans to Value" in cell G50.

Are you now astounded?

Yes, yes I am. Even more so at the jump from 2005 to 2006 - over a 250% increase in 12 months! Especially given that the average loan amount given out only seemed to increase by about 36k (although that is comparing drawdowns vs approvals), which when you consider house price increases at the time seems pretty slight - house prices on average increased by about 30k in the same period.

http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,14648,en.pdf

To be honest the more figures I look at from that site the less confident I get with the general accuracy of them. Not to say there wasn't a ridiculous increase in 100% mortgages during the period, but I'm having trouble reconciling the numbers. There isn't enough backing data or explanations to explain the differences, e.g. maybe certain figures include some lenders that other figures don't or there are definitional differences that aren't immediately obvious.

SkepticOne

Obviously still a lot of denial out there about the reckless lending practices of Irish banks during the bubble. It is too much for a lot of people to handle the idea that our banks would go to such lengths to prolong the bubble.

As I think I said earlier on this thread, this would not be an issue but for the fact that it is the tax payer that now has to foot the bill to the tune of billions that could otherwise be spent on stimulating the economy or providing essential services.

mike65

Just breaking.

Gardaí have begun a number of searches at the offices of Anglo-Irish in Dublin.

The Garda Commissioner assigned a number of officers from the Bureau of Fraud Investigation to assist other gardaí who are working with the Director of Corporate Enforcement.

gurramok

Why would they do that?

After all, they did nothing wrong and have nothing to say sorry for:rolleyes:

blinding

They should be saying

Please don't shoot !!!

SkepticOne

mike65 wrote: »

Just breaking.

Gardaí have begun a number of searches at the offices of Anglo-Irish in Dublin.

The Garda Commissioner assigned a number of officers from the Bureau of Fraud Investigation to assist other gardaí who are working with the Director of Corporate Enforcement.

As someone said on the radio, the State already owns the bank so why do we need the police to raid the place? The only explanation is that it has taken this long to shred the evidence and so only now can the Guards be called in. Another example of State inefficiency!