AIB & BoI recapitalisation discussion

nesf

Details from here: http://www.rte.ie/news/2009/0211/banks.html

The plan will allow the Minister to appoint 25% of the directors at each bank.

However, a statement from the Department of Finance clarifies that the State does not propose to take control of the banks being recapitalised.

The two banks have agreed to provide a 30% increase in mortgages for first time buyers and a 10% increase in loans to small and medium businesses.

They have also agreed to hold-off on repossessions on mortgage holders for 12 months after they fall into arrears.

Senior executives in the banks are to face a one-third cut in their remuneration.

No performance bonuses are to be paid to them, and their salaries are to be frozen.

Non-executive directors will have their fees cut by one-quarter.

1/3rd cut in senior executive pay + no bonuses + pay freeze. Enough to placate the masses baying for blood?


Thoughts:

8% dividend is reasonable.

1/4 directors means substantial political influence but not so much that they banks become Government puppets.

Increases in SME loans very badly needed, am disappointed it's not higher than 10% but any increase is good news for the sector.

Increase in FTB mortgages, meh. They're giving out so few at the moment that I doubt an extra 30% will actually amount to that many.

Pay cuts for top staff are correctly aimed at the top of decision tree, the Government shouldn't ask for rank and file workers to suffer. It's a value judgement whether they're harsh enough though, I know many people won't think they're big enough.

Darragh29

What will resolve the matter in my opinion is the political apes who caused and contributed to this calamity, being filmed by RTE being chased down Kildare Street with a mob behind them and torn shirts hanging off their backs.

What we need to see is the Minister for Finance trying to get out of his car when it has been turned upside down as he tries to leave Leinster House.

Victor

no bonuses

So if someone in a bank does a profound job at getting the economy out of the hole, they won't be rewarded?

Darragh29

Victor wrote: »

So if someone in a bank does a profound job at getting the economy out of the hole, they won't be rewarded?

I said it before on here, you wouldn't ask Shane Mc Gowan to run a pub, because it would be a stupid approach to running a pub. Same logic applies here, horses for courses, you don't ask failures to run successful operations.

BroomBurner

Does anyone know the full details behind BoI reporting that bad debts could double? They reported this this morning, I think, just after the recapitalisation went ahead. Will this change anything? Did our government know?

Sleipnir

Victor wrote: »

So if someone in a bank does a profound job at getting the economy out of the hole, they won't be rewarded?

Well, many of them did a profound job at getting the economy into the hole in the first place and were handsomely rewarded for the things they did to bring that about.
I would say it's their responsibility to help get us out of it without more reward.

thebman

nesf wrote: »

Thoughts:

Increases in SME loans very badly needed, am disappointed it's not higher than 10% but any increase is good news for the sector.

Increase in FTB mortgages, meh. They're giving out so few at the moment that I doubt an extra 30% will actually amount to that many.

This the only bit that really matters IMO. SME's need loans and the focus should have been primarily on that instead of 30% increase to FTB who can't get a mortgage anyway as they have no job.

Seems they would have been better off putting 30% increase in loans to SME's and then when jobs were created, people would either pay their existing mortgage or go for one if they have a job.

djpbarry

Darragh29 wrote: »

What will resolve the matter in my opinion is the political apes who caused and contributed to this calamity, being filmed by RTE being chased down Kildare Street...

...by the people who elected them. Three times.

scargill

never was the phrase "lunatics running the asylum" more apt.

K-9

BroomBurner wrote: »

Does anyone know the full details behind BoI reporting that bad debts could double? They reported this this morning, I think, just after the recapitalisation went ahead. Will this change anything? Did our government know?

It has been common knowledge this would happen. In fact many have been calling for realistic bad bebt write offs!