The banking crisis and common sense

Slattery86

People how about a little common sense and rant-free debate when discussing the banks and banking crises for once? This is how things go in the financial world- the entrepreneurs create the wealth, this creates jobs in the private sector and creates the taxes which hence funds the public sector. Now get this, many businesses (whether small or large) need banks for savings and loans throughout their tenure- particularly when they are in danger of going bust.

You punish the banks, this hurts the businessmen, hence you hurt jobs in the private sector as well as the state coffers in regard to public pay and the other government services and infrastructural expenses which come about from the revenue that private taxes provide. The government can also use public money to get loans off of the banks to provide vital physical and social infrastructure such as roads, trains, hospitals, schools- all of which are of economic importance obviously.

Punish the banks, and you are punishing businesses and the country as a whole financially, including jobs in both the private and public sectors. A country simply runs more smoothly in terms of finance when we have banks that are able to provide credit to businesses, individuals and the government.

The banks are simply large businesses, which have amassed great wealth over generations, and are hence able to give out loans for business start-ups, home mortgages, car purchases, insurance premiums etc. which would have been unaffordable for those taking out the loan had they not done so through those selfsame banks.. The majority of people would have to save for at least 30 or 40 years to achieve a sufficient sum of money to purchase a property. The magic of the banking system is that so long as you can pay the interest every week-you can purchase assets or possessions which are financially well out of your reach on ordinary terms, and pay for them throughout the years- or even up until retirement.

Now why should we punish the banks when they are the only source in most cases for loaned money that over time works towards wealth generation, the property market, the state coffers and the general economic well-being of the public and nation at large? If anything, without a banking system there would probably be little or no housing, public infrastructure or services, nor the ability for wealth generation and jobs creation at even a miniscule level. Now why are we as a nation behaving so irrationally on this matter? Have many of these peoples actually looked into even the basics of the situation?

The situation around the Bear Stearns collapse of 2008 should also serve as a reminder for anybody willfully wishing sectors of the banking or financial system into downfall.

Mr. Incognito

Michael Fingleton is that you?

Firstly I'd be more impressed if that wasn't a copy and paste.

Secondly, I have no idea what point you are trying to make. Punish the Banks? What the heck are you talking about.

The banks are simply large businesses, which have amassed great wealth over generations, and are hence able to give out loans for business start-ups, home mortgages, car purchases, insurance premiums etc. which would have been unaffordable for those taking out the loan had they not done so through those selfsame banks.. The majority of people would have to save for at least 30 or 40 years to achieve a sufficient sum of money to purchase a property. The magic of the banking system is that so long as you can pay the interest every week-you can purchase assets or possessions which are financially well out of your reach on ordinary terms, and pay for them throughout the years- or even up until retirement.

This is utter tripe. Banks amass wealth by being custodians for people's savings. They have a fiscal responsibility to those deposit holders. The collapse of banks was due to one simple reason. The greed of the bankers. They borrowed money based on cheap interbank rates and loaned all that money out at a premium. So recklessly and fecklessly did they fire out this cash that they pushed the price up property to levels that people would have to save for 30 or 40 years to pay off the mortgage.

The anger that most people have around the banks is simple and I'd like you to reply to this- that taxpayers money is being used to bail out a greed mongering institution like Anglo whose business plan was to give money to developers and skim off their profits while all was going well, when property took a dive and Anglo had feck all reserves to call on, our government, instead of letting the greedy morons go to the wall decided that they were "integral to our economic stabilty" and wading in with 4 billion, a figure due to rise to 7 billion soon. Anglo in the mean time has not lent a red cent and the run by deposit holders means that we as a people are left holding a very expensive hollow shell of a bank with written down assets not even worth the price of the plans they were drawn on.

The anger that most people have is that their were other banks who did not engage in such reckless practices and the whole point of capitalism is pretty much the same as natural selection, the strong survive, the stupid the greedy and the over-leveraged go to the wall. Let them collapse and leave Capitalism sort it out in other words.

The anger that most people have is that these banks engaged in creative accounting that drove their share prices up to levels that when the bust came wiped out people's life savings, investments and pension funds.

The anger that most people have is people like you who don't seem to accept these simple facts and want to gloss over the fact that we have thrown 54 billion of our grandchildrens money into a black hole that we will be burdened with as a country in exchange for no apology, concessions or any meaningfull changes.

dan_d

Personally I'm at the stage where I couldn't care less about what the banks did, but I would be a huge supporter of seeing that it's a New Year and decade and whatever the hell else, I'd wipe out the board of every bank in the country, and most of their senior managers and replace them - with non civil servants and people who have absolutely no ties to development or Government. Throw in the board of FAS for good measure, the DDDA, the DAA, Iarnrod Eireann, An Bord Pleanala and the planning depts up and down the country.
Wipe the slate clean. And the words "creative" and "accounting" should never be used in the same sentence.Always a very bad sign!

OldJay

Slattery86 wrote: »

You punish the banks, this hurts the businessmen, hence you hurt jobs in the private sector as well as the state coffers in regard to public pay and the other government services and infrastructural expenses which come about from the revenue that private taxes provide

Emotionally blackmailing the average taxpayer won't cut it as any defence for the free-for-all that has existed behind the banking system.

Slattery86

Slattery86 wrote: »

The banks are simply large businesses.


Large businesses that are no longer viable/solvent..

Why in the f*ck should we bail them out?...you sound like a free market laisez-faire capitalist..do they not deserve to go out of business???

jmayo

Slattery86 wrote: »

People how about a little common sense and rant-free debate when discussing the banks and banking crises for once? This is how things go in the financial world- the entrepreneurs create the wealth, this creates jobs in the private sector and creates the taxes which hence funds the public sector. Now get this, many businesses (whether small or large) need banks for savings and loans throughout their tenure- particularly when they are in danger of going bust.

You punish the banks, this hurts the businessmen, hence you hurt jobs in the private sector as well as the state coffers in regard to public pay and the other government services and infrastructural expenses which come about from the revenue that private taxes provide. The government can also use public money to get loans off of the banks to provide vital physical and social infrastructure such as roads, trains, hospitals, schools- all of which are of economic importance obviously.

Punish the banks, and you are punishing businesses and the country as a whole financially, including jobs in both the private and public sectors. A country simply runs more smoothly in terms of finance when we have banks that are able to provide credit to businesses, individuals and the government.

The banks are simply large businesses, which have amassed great wealth over generations, and are hence able to give out loans for business start-ups, home mortgages, car purchases, insurance premiums etc. which would have been unaffordable for those taking out the loan had they not done so through those selfsame banks.. The majority of people would have to save for at least 30 or 40 years to achieve a sufficient sum of money to purchase a property. The magic of the banking system is that so long as you can pay the interest every week-you can purchase assets or possessions which are financially well out of your reach on ordinary terms, and pay for them throughout the years- or even up until retirement.

Now why should we punish the banks when they are the only source in most cases for loaned money that over time works towards wealth generation, the property market, the state coffers and the general economic well-being of the public and nation at large? If anything, without a banking system there would probably be little or no housing, public infrastructure or services, nor the ability for wealth generation and jobs creation at even a miniscule level. Now why are we as a nation behaving so irrationally on this matter? Have many of these peoples actually looked into even the basics of the situation?

The situation around the Bear Stearns collapse of 2008 should also serve as a reminder for anybody willfully wishing sectors of the banking or financial system into downfall.

Ah the poor banks or should that read us poor bankers ?

You have forgotten one very important point in your long ramble.
In the normal business world if you screw up so badly as the banks have you go bust, out of business, finito.
Except the banks use their position to blackmail the government to bail them out, thus sticking the taxpayers for the mess.
These taxpayers would also be the very customers, who in the case of the Irish banks, have been royally screwed over the years through exorbitant charges, interest rates etc.

Since when have Irish banks been these benevolent entities that has backed Irish entrepeneurs, given a sh** about Irish business and have lent money to personal borrowers to buy houses or cars.
Anything they have lent they have damm well charged for and made money on.
That is their function so fair enough, but don't pull the heart strings and almost make them out to be a bleedin charity as your post appears to almost make out.

I have seen back in the early nineties how Irish banks treated small Irish companies. They acted more like feudal lords or money lenders than bankers.
Oh I forgot over the last 9/10 odd years they rolled out the red carpet for every tin pot developer who wanted to build sh**e apartments on a flood plain in Carrick on Shannon or wherever. :rolleyes:
Maybe they are the entrepeneurs you are on about ?

AFAIK, and somebody might correct me on this, one of Ireland's most successful entrepeneurs, Sean Quinn sourced most of the money for his early ventures outside of Ireland.

Oh and the basics of the situation is that most of them are insolvent, broke for want of a better word, their value is a miniscule amount of what they were at their height.
Oh and the reason they got to this point is they were run by exceedingly greedy, incompetent, arrogant, overpaid backslapping inbreds.
Most investors don't trust them because they believe they and their stockbroking offshoots have been lying through their teeth.

PS I don't want to punish banks per say, I want to punish the useless greedy twats that have run them and continue to run them.