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why not?

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  • 05-03-2009 2:21am
    #1
    cm2000
    Closed Accounts Posts: 384 ✭✭


    Inspired by the mention of a government bond, I was wondering something, maybe its stupid, i don't know. We pay more interest servicing our loans than most other EU countries. Our National Pension Reserve funds has alot of money accumulated which is invested. Why not instead of borrowing from international markets, borrow from the NPRF, and pay the same or less interest on those loans meaning we can control the rates we pay and grow our reserve fund at the same time. I know someone smarter than me thinks this is ridiculous for many reasons but I was thinking about it and thought I'd throw it out there....


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    #2
    Time Magazine
    Registered Users Posts: 8,452 ✭✭✭Time Magazine


    They've already tapped into the NPRF afaik.


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    #3
    cm2000
    Closed Accounts Posts: 384 ✭✭cm2000


    The Economist wrote: »
    They've already tapped into the NPRF afaik.

    for the bank capitalization yeah but would it not make more sense to borrow for current spending there too and keep the flow of money internal and control rates?


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    #4
    TGPS
    Closed Accounts Posts: 50 ✭✭TGPS


    cm2000 wrote: »
    Inspired by the mention of a government bond, I was wondering something, maybe its stupid, i don't know. We pay more interest servicing our loans than most other EU countries. Our National Pension Reserve funds has alot of money accumulated which is invested. Why not instead of borrowing from international markets, borrow from the NPRF, and pay the same or less interest on those loans meaning we can control the rates we pay and grow our reserve fund at the same time. I know someone smarter than me thinks this is ridiculous for many reasons but I was thinking about it and thought I'd throw it out there....

    The NPRF isn't a pile of cash. A lot of it is tied up in investments in different assets - if we raid it we have to sell the assets at knockdown prices - generating significant losses.

    The fund also has to maintain a certain cash reserve - if we tap that we still have sell assets to maintain the reserve.

    Given the cost of borrowing, it's probably still cheaper even for Ireland to borrow, rather tha take a big hit on the fund.


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