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No bailout money has gone into the banks
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In fact, Sponge Bob has simply missed the point by a wide margin. He is fighting against the claim that no bailout money was used either directly or indirectly to fund the bank recapitalisations, which isn't the point of the thread.
Really
It doesn't matter to my point whether the government, say, put troika money into the NPRF and then used the NPRF to fund the banks - although there isn't any evidence of them doing this either.
There isnt any evidence, there isnt any hard evidence that the pools of cash were strictly separated post 01/01/2011 either you must concede.The point is interesting in light of the claim made by Alan Ahearne (an ex-advisor of Lenihan) that the "format of the bailout was wrong" because it made the State liable for any money Europe put into the Irish banks.
He meant the likes of the €70bn ELA ( now reduced to €45bn or so). Again the state is potentially liable for the funding issued ( eg BONDS) to replace much of this ELA so I still fail to see the difference in terms of liability.The other point of public/political debate on the crisis that this relates to is the idea that the Spanish bailout - or, now, subsequent ESM bailouts - could go directly to the banks........
The Spanish tried that recently but the EU put the sovereign on the hook for it. We did much better there because we had access to Repo cash back in the day and that hasn't gone away you know.
Just that unlike other funds put into banks the state is not on the hook for Repo cash. The Spanish banks put the hand out when Repo eleigibilty had been constrained after all the cack our lot put in there and after the LTRO operation had ceased...and the Spanish fairly fed at that trough.
If the premise of the thread is true ...that we carefully invested no more than €20bn odd of our cash in the banks.....then why does our department of finance think they provided €375BN of "State Aid" in 2008 alone (7 of 21) ...not to split and resplit a hair like. 0 -
Sponge Bob wrote: »why does our department of finance think they provided €375BN of "State Aid" in 2008 alone[/URL] (7 of 21) ...not to split and resplit a hair like.
Well if we're goning to split hairs and all that, they guaranteed all the deposits (including bonds) in the Irish banks - which amounted to that much. Now it didn't actually require them to pay anything into the banks in 2008, but the markets (and EU) saw it as state aid.0 -
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Sponge Bob wrote: »If the premise of the thread is true ...that we carefully invested no more than €20bn odd of our cash in the banks.....then why does our department of finance think they provided €375BN of "State Aid" in 2008 alone (7 of 21) ...not to split and resplit a hair like.
First, the report specifies "state support" not "state aid" (i.e. A state backed guarantee rather than hard cash).
Secondly, figures from 2008 are all very interesting but since the "bailout" loan package only kicked in from Q4 2010 onwards they are hardly germane to how the monies from 2010 onwards were/are spent.0 -
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Sponge Bob wrote: »Really
There isnt any evidence, there isnt any hard evidence that the pools of cash were strictly separated post 01/01/2011 either you must concede.
Of course there is - the sources are listed. If the NPRF is listed, or "Excequer cash" is listed as the source, that's the source.Sponge Bob wrote: »He meant the likes of the €70bn ELA ( now reduced to €45bn or so). Again the state is potentially liable for the funding issued ( eg BONDS) to replace much of this ELA so I still fail to see the difference in terms of liability.
The Spanish tried that recently but the EU put the sovereign on the hook for it. We did much better there because we had access to Repo cash back in the day and that hasn't gone away you know.
Just that unlike other funds put into banks the state is not on the hook for Repo cash. The Spanish banks put the hand out when Repo eleigibilty had been constrained after all the cack our lot put in there and after the LTRO operation had ceased...and the Spanish fairly fed at that trough.
If the premise of the thread is true ...that we carefully invested no more than €20bn odd of our cash in the banks.....then why does our department of finance think they provided €375BN of "State Aid" in 2008 alone (7 of 21) ...not to split and resplit a hair like.
But this is (again) you attacking something I'm not saying. The liability is the same whether the government uses State sources or external bailout money directly - but that's not the same as the legal source of the money being a State source rather than external funding.
So, again, I'll point out that you haven't understood at any point in this thread what I'm saying.
As far as I can make out, you think I'm arguing that the troika bailout has, in effect, been totally and entirely separate from the banking bailout, that the money involved in the troika bailout has been completely and utterly separate in every way, both legal and actual, from the money in the banking bailout, and that by virtue of these supposed facts, the government has not acquired any legal liability to our external partners in respect of the banks, nor can it be said to have acquired any debt on our behalf from the external partners in respect of the banks.
What I am saying, in fact, is that:
1. the government has evidently acquired public debt in paying for the banks;
2. that some of that public debt has obviously been acquired from the troika;
3. that the liability involved is the same whether the government put money straight into the banks from the troika's pot or used the troika money to substitute for Exchequer cash in deficit spending and used the Exchequer cash to put into the banks.
My main point is that despite all of those three points, and particularly despite point 3, the government has in fact been careful to maintain the legal/accountancy origin of the money going into the banks as State sources. What you're arguing, as far as I can see, is that this is a fiction - and of course it's a fiction, but it's an important fiction in itself. There is no point in you arguing it's a fiction, though, because nobody, least of all me, is denying that!
cordially,
Scofflaw0 -
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That would be a rather unilluminating way to describe it Scofflaw.
1. The government has put in hard cash ( see post 1)
2. The ECB has put in cash on loan (Repo and LTRO) in return for collateral such as Lehmans Bonds and Government Bonds etc....I think it was Anglo pulled that one off with Lehmans.
3. The Irish Central Bank has put in 'assets' called ELA , around €45bn of it, the promissory notes are a portion of this. Government Guaranteed.
4. Finally our banks themselves have even issued Bonds To Bondholders for which the state has also provided guarantees ..not cash. Up To €18.35 bn worth of such in one week last year. . These were used to repay a portion of 2 or 3 above that fell due.0 -
Sponge Bob wrote: »That would be a rather unilluminating way to describe it Scofflaw.
1. The government has put in hard cash ( see post 1)
2. The ECB has put in cash on loan (Repo and LTRO) in return for collateral such as Lehmans Bonds and Government Bonds etc....I think it was Anglo pulled that one off with Lehmans.
3. The Irish Central Bank has put in 'assets' called ELA , around €45bn of it, the promissory notes are a portion of this. Government Guaranteed.
4. Finally our banks themselves have even issued Bonds To Bondholders for which the state has also provided guarantees ..not cash. Up To €18.35 bn worth of such in one week last year. . These were used to repay a portion of 2 or 3 above that fell due.
No, that just throws a lot of verbiage and figures up, without changing the picture at all. The government does not pay bondholders in the sense that hatrickpatrick was asking about - that's why there isn't a table showing government payments to bondholders, because it doesn't happen that way.
cordially,
Scofflaw0 -
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