And Brian Lenihan provides a critique of critics of the various banking plans here: http://tiny.cc/RfhVw
(Brian Lucey gets a rap @10min into the interview)
It would be easy to critique Brian Lenihan’s critique of the critics, but he hasn’t brought anything new to the table..
Brian Lucey is an advocate of nationalisation of the banks in order to clean out the Augean stables. Yet in this critique of the FG policy, he warns rightly against the “politicisation” of the credit allocation process, citing Ronald Reagan’s damning aphorism “I’m from the governemt …trust me.” With these words, has he not shot his own solution in the back of the head.
I have zero faith in what would amount to a market totally dominated by state owned banks, I’d rather see banks close down quite frankly, and new privately run ones come in to take their place.
@JL
Not really. The main fear of nationalisation seems to be that we cant trust the govt (and full marks for the recgnition of the quote). Now, in the case of NAMA we cant, as they have already more or less said they will do whatever (at least the GP have). In the case of nationalisation, temporary nationalisation, we stated that there was an incentive to NOT politicisise to allow a clean quick exit. The existence of the imperative to refloat SHOULD act as a brake on the most overt politicisation. But, its certainally arguable
@ Karl
Yes, very nice. And in the meantime you’ll have a stock of working capital and loads of notes (no ATM’s remember, no money transmission either) ready will you. Its lovely in theory, which is the warm version of the place inhabited by the Econ in Leijohnufids classic article… I live here.
@ Lorkan. This isnt the first time that Mr Lenihan has taken a pop at me. In November he accused me and others who were saying that the total losses of the banks could exceed 20-25b (which, at the time I was saying it I felt…hey thats at the outer edge Brian) as “plucking figures from the air”. Now, Im not defunct, yet; he is probably not mad. But he is in authority…if the quote fits…
Good piece today, I think the word ‘nationalisation’ should be avoided though and a substitute found, maybe ‘conservatorship’
@Bryan, you’re not defunct yet, but it’s ten hours to BOI’s statement so some revision may yet be required.
@brian lucey
touchy touchy! In fact the ‘stock of cash’ might be required more if you nationalise banks, the last time ATM’s ran dry was due to a union dispute, multiply x 1000 and you might get the picture.
re: Lenihan – I don’t know that ‘having a pop’ is totally true, sometimes you deserve it, the time on bloomberg where you said that ‘loan values should be written down by 50%’ was a bit out there, and to be fair I think you pulled that figure out of your head rather than based it on any analysis.
Re: Temporary Nationalisation – When the time comes to refloat and the equity markets are stagnating in a world realising that quantitative easing has a cost, do you really think that little old Ireland will get a fair price for our now new glorious banking system? For me, I don’t believe temporary nationalisation would be temporary …
@Karl
Lets wait and see. I believe that the loan values should be that low. Yes. Its not out of my head any more than the last figure was. and tat is now seen as an underestimate.
Im not touchy, ffs, Im an academic. I get harsher criticisim every day. But, its usually a) justified and b) in the spirit of a debate, not in the spirit of “shaddup, im the minister”. If he wanted a real debate he or Alan would come on a TV or radio programme with me or Karl or anyone else. He wont. And nobody from finance will. I wonder why?
As for the first point, doesnt that prove my contention?
@Brian
so are you saying that you have analysis showing that 50% is a more accurate figure? If so will you publish it?
Regading Temporary Nationalisation – When the time comes to refloat and the equity markets are stagnating in a world realising that quantitative easing has a cost, do you really think that little old Ireland will get a fair price for our now new glorious banking system? For me, I don’t believe temporary nationalisation would be temporary …
@brian L – on 50% drops, honestly, will you publish the analysis? or even just email it to me?
Brian,
define speedy. Other Anglo Saxon govts have confronted their banking demons, conducted stress tests, which are at least honest(ish), allocated liquidity and capital to shore up the system. The Brits are now contemplating an exit from their positions and US banks are paying back the TARP. Our guys are still togging out in the dressing room.
What makes you think they would clear out ofthe banking system quickly. FF would see it as a means of wielding power. FG/LAb would no doubt get bogged down in some ideological debate about the commanding heights of the economy.
I think part nationalsiation by conversion of the pref to equity and thus acquiring majority control might be better. That way we can see what the “banksters” are up to.
14 replies on “Plans for the Banks”
And Brian Lenihan provides a critique of critics of the various banking plans here: http://tiny.cc/RfhVw
(Brian Lucey gets a rap @10min into the interview)
It would be easy to critique Brian Lenihan’s critique of the critics, but he hasn’t brought anything new to the table..
Brian Lucey is an advocate of nationalisation of the banks in order to clean out the Augean stables. Yet in this critique of the FG policy, he warns rightly against the “politicisation” of the credit allocation process, citing Ronald Reagan’s damning aphorism “I’m from the governemt …trust me.” With these words, has he not shot his own solution in the back of the head.
I have zero faith in what would amount to a market totally dominated by state owned banks, I’d rather see banks close down quite frankly, and new privately run ones come in to take their place.
http://www.mortgagebrokers.ie/blog/index.php/2009/05/18/the-myth-of-nationalisation-as-the-solution-for-banks/
@JL
Not really. The main fear of nationalisation seems to be that we cant trust the govt (and full marks for the recgnition of the quote). Now, in the case of NAMA we cant, as they have already more or less said they will do whatever (at least the GP have). In the case of nationalisation, temporary nationalisation, we stated that there was an incentive to NOT politicisise to allow a clean quick exit. The existence of the imperative to refloat SHOULD act as a brake on the most overt politicisation. But, its certainally arguable
@ Karl
Yes, very nice. And in the meantime you’ll have a stock of working capital and loads of notes (no ATM’s remember, no money transmission either) ready will you. Its lovely in theory, which is the warm version of the place inhabited by the Econ in Leijohnufids classic article… I live here.
@ Lorkan. This isnt the first time that Mr Lenihan has taken a pop at me. In November he accused me and others who were saying that the total losses of the banks could exceed 20-25b (which, at the time I was saying it I felt…hey thats at the outer edge Brian) as “plucking figures from the air”. Now, Im not defunct, yet; he is probably not mad. But he is in authority…if the quote fits…
Good piece today, I think the word ‘nationalisation’ should be avoided though and a substitute found, maybe ‘conservatorship’
@Bryan, you’re not defunct yet, but it’s ten hours to BOI’s statement so some revision may yet be required.
@brian lucey
touchy touchy! In fact the ‘stock of cash’ might be required more if you nationalise banks, the last time ATM’s ran dry was due to a union dispute, multiply x 1000 and you might get the picture.
re: Lenihan – I don’t know that ‘having a pop’ is totally true, sometimes you deserve it, the time on bloomberg where you said that ‘loan values should be written down by 50%’ was a bit out there, and to be fair I think you pulled that figure out of your head rather than based it on any analysis.
Re: Temporary Nationalisation – When the time comes to refloat and the equity markets are stagnating in a world realising that quantitative easing has a cost, do you really think that little old Ireland will get a fair price for our now new glorious banking system? For me, I don’t believe temporary nationalisation would be temporary …
@Karl
Lets wait and see. I believe that the loan values should be that low. Yes. Its not out of my head any more than the last figure was. and tat is now seen as an underestimate.
Im not touchy, ffs, Im an academic. I get harsher criticisim every day. But, its usually a) justified and b) in the spirit of a debate, not in the spirit of “shaddup, im the minister”. If he wanted a real debate he or Alan would come on a TV or radio programme with me or Karl or anyone else. He wont. And nobody from finance will. I wonder why?
As for the first point, doesnt that prove my contention?
@Brian
so are you saying that you have analysis showing that 50% is a more accurate figure? If so will you publish it?
Regading Temporary Nationalisation – When the time comes to refloat and the equity markets are stagnating in a world realising that quantitative easing has a cost, do you really think that little old Ireland will get a fair price for our now new glorious banking system? For me, I don’t believe temporary nationalisation would be temporary …
@brian L – on 50% drops, honestly, will you publish the analysis? or even just email it to me?
If you still have the analysis from the prediction that we’d have a property boom well into 2010 I’d like that too (from this story)
http://archives.tcm.ie/businesspost/2006/02/12/story11769.asp#
Brian,
define speedy. Other Anglo Saxon govts have confronted their banking demons, conducted stress tests, which are at least honest(ish), allocated liquidity and capital to shore up the system. The Brits are now contemplating an exit from their positions and US banks are paying back the TARP. Our guys are still togging out in the dressing room.
What makes you think they would clear out ofthe banking system quickly. FF would see it as a means of wielding power. FG/LAb would no doubt get bogged down in some ideological debate about the commanding heights of the economy.
I think part nationalsiation by conversion of the pref to equity and thus acquiring majority control might be better. That way we can see what the “banksters” are up to.