Public Finances and the Recapitalisation of the Banking Sector

Scott Rankin and Rossa White at Davy Research have a new quantitative analysis on what the banking crisis may cost in terms of (i) total system losses and (ii) re-cap costs (taking into account operating profits, capital ratios desired by govt etc.) and (iii) the % of that re-cap cost that may come from the government. They also look at how much of our long-term funding has been successfully done ytd and estimate the trajectory for government debt.

The paper is available here.

4 replies on “Public Finances and the Recapitalisation of the Banking Sector”

Davy’s have just confirmed what I suspected all along,”it was only a flat battery and one good push will get Her going”.Word of caution however re. Anglo and Nationwide with 15% and 22.5% bad loans,they look like there out of petrol aswell,just as well the ECB opened a new Petrol Station recently.Now where’s that remote control till I flick to Discovery Ch. I hear there’s a good documentary on some Banking Crises out abroad,out foreign somewhere,not Ireland ..”WERE DIFFERENT”

It mentions moving 90B of assets to NAMA at a 20% haircut and then contains the gem “Net debt will rise only to the extent that NAMA fails to realise value over time.”

Sure why not assume a 0% haircut and they could draw even more optimistic conclusions, providing of course NAMA does its job and realises value over time…..


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