Who will pay for bank losses?

David McWilliams -

This week, let’s consider the probability of another banking crisis. Mortgage defaults – both owner-occupier and buy-to-lets – could overwhelm the banks’ fragile capital buffers, meaning the banks will need more capital in the next few years. Because the Irish state is bust and has no capital to give, this new capital can only come from two places. The first source is the European institutions (or the taxpayers of the richer countries). The second source is the depositor in the Irish banks.

What happens if the taxpayers of other countries don’t feel like giving the Irish banks cash?

In such an event (which is quite likely) the capital will have to come from a smash and grab exercise on Irish deposits. This is exactly what happened in Cyprus earlier this year. The precedent is there in black and white. More significantly, it is a precedent hatched and copper-bottomed during the Irish presidency of the EU. We can hardly orchestrate a depositor raid from Dublin on Cypriots and then cry foul if the rest of the EU suggest that this is exactly what we have to do to ourselves in the event of a new banking crisis.

There is another solution to a new banking crisis. It is to leave the euro, beef up our own Central Bank and ask it to inject new Irish punts into the banks to avoid a deposit raid.

For many, this would be a step too far. But it is only a step too far if we can avoid having to make the choice.

If faced with the prospect of robbing deposits to keep the banks afloat or reverting to our own currency, what’s the likely choice of politicians who want to be re-elected?


Read More: davidmcwilliams.ie


7 Responses to Who will pay for bank losses?

  1. Diane September 17, 2013 at 9:07 am

    “There is another solution to a new banking crisis. It is to leave the euro, beef up our own Central Bank and ask it to inject new Irish punts into the banks to avoid a deposit raid.”
    I have been saying this (as many other have) for the last 4 years. Now someone of standing the the public realm is saying the same thing, at last. The Euro is a sinking ship, why are we still on it? Are the government masochists, or are they just stupid? Probably the latter, when Crighton told the crowd in Macroom, that we can’t go back to the Punt, ‘Because we wouldn’t have a tradable currency’. The Punt was tradable before, what in her empty head changed that outlook?

  2. fraz1971 September 17, 2013 at 11:57 am

    I like David McWilliams but, we didn’t need him to inform us about bail-ins. It will happen globally.

    A debt free sovereign currency would be the way to go. That isn’t a likely prospect with the traitors and slave masters in the big house.

  3. fraz1971 September 17, 2013 at 11:59 am

    Would it not be wise to move money to Cyprus? Surely they will not do it twice there.

    • Diane Denizen September 17, 2013 at 1:16 pm

      Wouldn’t rule it out Fraz, the only time money is safe is when its in your pocket or buried on your land.

  4. Charles Magus September 17, 2013 at 1:25 pm

    A Central Bank is not the Answer Diane! What we need is a National Bank that is owned by the People and a Sovereign Government of the People creates our Currency
    Interest/Debt Free! ie No Usury! It is all owned by Zionists who strip away the Assets of the Nation that they infiltrate through the Un-payable Debt of Interest! They then use this money to Destroy us, Subverting our Laws, corrupting and Controlling our Government to create laws that protect them and destroy us! SAY NO TO CENTRAL BANKS OF ZIONIST USURY!!!! we have no debt only perceived debt! It was obtained through Fraud and politicians who sold us out! The ECB is just another extension of the Rothschild Central Banks! As is the IMF, The Bank of international Settlements, the Federal Reserve, Bank of England, etc, etc,

    • Diane Denizen September 17, 2013 at 11:32 pm

      Without doubt Charles that is the answer, but in the short term the Euro must go, getting even with Rothschild comes later!

  5. Pingback: Reserve Bank cancels the licence of The Srikakulam Co-operative Urban Bank Ltd., Srikakulam – Andhra Pradesh | Simple Financial Mantras


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