A massive police investigation - with international expertise - of all of our reckless lenders and the politicians, developers and businessmen whose corruption they have been financing.

With the criminal personnel out of the way we can then have a thorough inquiry.

In Ireland the law prevents justice for the powerful - even when their criminal corruption has caused €100 Billion of damage. Let’s have the law they will never give us and the blanket police investigation they will never allow. Let’s take the crony out of Irish capitalism.
Would you prefer the cronyism continued but we never (or glacially)investigate it so we can pretend that it isn’t there?

“I have made it abundantly clear several times that I want the 400 most guilty prosecuted under whatever new laws are necessary and brought before tough judges with the legal powers to hand out stiff sentences.”

In legal terms, this is nonsensical.

You can’t prosecute people for what has allready happened under ‘new laws’. You can only prosecute them for breaking laws that were allready in existence at the time they did whatever they did. If any are believed to have broken existing laws (and there is evidence to back it up), then they can be prosecuted. But, you can’t bring in ‘new laws’ and apply them retrospectively. Even if a government here did that, the European courts would throw any such case out. It would be the end of democracy if a government brought in ‘new laws’, then prosecuted people under those ‘new laws’ for things that were not illegal prior to the ‘new laws’ being introduced.

Don’t get me wrong. I don’t want to see violent offenders and repeat burglars released - they should in fact be getting longer sentences.

Instead I want to see many members of staff of corrupt institutions, especially the most corrupt like Anglo, Nationwide and the repeat offender AIB, doing porridge for a long time for the €100 Billion in human misery they have caused. If an individual can be jailed for not paying his TV licence in instalments then he should be put away for twenty years for causing 1 million times more damage in direct costs to the exchequer with no prospect of it ever being paid back.

Eoin, you always told us we couldn’t touch a hair on the head of senior bondholders and that we had to leave private shareholdings in the two major (and insolvent) banks. Fair enough. But that means that the bill for this outrage will have to come entirely from the deprivation of the liberty of the perpetrators. The evil 400 who carried out this giganticly costly crime will have to pay us back through having their liberty deprived for an extended period.

“It’s time for justice”

“now let’s have €65 Billion of punishment.”

“changing the constitution”

“€65 Billion Euro directly and perhaps €100 Billion in total of human misery has been caused”

Yes, i think we’re all clearly aware of where you’re coming from on this. Didn’t Zhou mention something about lynch mobs and anarchy on the streets? You actually have no interest in using an enquiry to figure out answers and preventing this from happening again, you just want to get even. But then, all Irish bankers are purely evil right?

Steady on. The Governments that drove through the legislation and pursued the policieis that facilitated and increased the severity of this mess were elected by the Irish people in free and fair elections. The current Government won’t budge until enough people make clear they want it gone. Don’t get mad; get even.

All Irish lenders engaged in the reckless fueling of a property bubble.
A full police investigation of all of them is imperative. The minister has told us there will be no enquiry for many months. Great - we can send in the police now to get the major skeletons out into the open. A couple of months of a massively resourced investigation - with mafia and financial crime busting attorneys in assistance - should get the job done.

We are about to give some of the banks €54 Billion based mainly on their own word. You think they won’t cheat? They are almost exactly the same top executives who drove the lending bubble.
Reread the controversy section of the wiki entry on this bank.

http://en.wikipedia.org/wiki/Allied_Irish_Banks

Would they swop €54 Billion with you if you had a record like that?
They wouldn’t give you a cent.

On your specific points:
“As I understand it criminal investigations are taking place.”
Only in Anglo, Nationwide and Irish Life - and ONLY on specific matters. There are no criminal & civil investigations into AIB, BOI, EBS, Irish Permanent, Ulster Bank, Bank of Scotland or the other lenders responsible for this giant property bubble. We need to go into every nook and cranny of these institutions BEFORE we swop €54 Billion with them. There is now zero danger of sovereign default. It’s time for justice. A non-complicit opposition would be calling for full scale criminal & civil investigations of our entire lending sector now.

“If the law and its enforcement are not sufficiently forceful to root out and prosecute any wrong-doing it must be strengthened, but any changes cannot be applied retrospectively.”
€65 Billion Euro directly and perhaps €100 Billion in total of human misery has been caused by the lending bubble. The crony capitalists made the laws and appointed the regulators. Let’s not play by their rules any more.
If it is a choice between changing the constitution to introduce the laws we SHOULD have had, or letting the perpetrators escape the full measure of the punishment they deserve because they have rigged the laws, then I know what I choose.

We have had the €65 Billion of crime - now let’s have €65 Billion of punishment.

The problems are in the areas of politics, policy and regulation. Only the people, in a general election, are empowered to exercise their ultimate authority and pass judgement. And any alternative government must be prepared to spell out in detail the reforms they propose to address these problems.

It would be far better for those seeking vengeance to get together and organise a petition to the President asking her please to convene the Council of State and to advise the Taoiseach that a large number of the electorate demands that he seek her permission to dissolve the Dail. I realise there is no constitutional provision to permit the “recall” of a government, but it would be unwise for the Goverment to reject such a call and to spit so blatantly in the face of the people.

The Government has done a certain amount to stabilise the ship of state. For the next month or two no major challenges similar to Lisbon II or the budget are envisaged. It is time for the people to decide.

Extending anonymous good wishes is possibly better than letting him know who you really are!

So: God moves in mysterious ways. Perhaps the fear of death will help more people tell the truth?

Just why is it that only Zhou wants to delay defer and deny?

I think we should leave the medical advice to the Minister’s doctors.

I have posted elsewhere that it is my opinion that our civil (as opposed to criminal) legal system is deficient as the costs of investigating or prosecuting a civil suit against a bank are so prohibitive as to make it virtually impossible, save in the cases of gross and manifest wrongdoing or in cases where the wronged party is hugely wealthy. (One would have been interested to know what Sean Quinn’s legal position vis-a-vis Anglo and its directors was.)

‘We should be aiming to have one million people in jail asap.
Alternatively, we could drop the pretence and go straight for anarchy and street lynchings. We could even bring in witch burning again so women can have their prettier neighbours burnt at the stake out of jealousy

As I read it, E65 was simply pointing out that poor people routinely get sent to jail for relaltively small sums. We have seen some very dubious (to put is at its mildest) financial practices with ugly results for Joe Public.
Big bread and big social costs.

Our laws have been shown to be appallingly inadequate for the task of financial regulation. If that state of affairs was deliberately created, the culpability goes far higher than the bankers. In any case, there has been no meaningful enquiry to date.

That is obviously unfair, but it’s also foolish in my view. The banksters are already finding ways to reoffend, and the public is losing confidence in the governmental (constitutional) system. Lets not go that dangerous road if we can help it.

My best wishes to the Minister for his health

You are mixing me up with somebody else there. I never said I was a banker and I certainly never said I was humble.

I am impressed by your knowledge of the TV licence imprisonment figures. I believe the TV licence laws apply equally to everyone. What you are suggesting is that we bring in special draconian and fundamentally unfair laws to target certain people.

Anyway, this is all a bit beside the point of the Minister’s statement.

You say you are a humble banker from a (presumably reputable) unguaranteed bank operating in Ireland. What have you got to fear? I am only after the worst 100 in the entire sector.

http://www.irishexaminer.com/ireland/ideysnmhey/

“Figures released to Fine Gael TD Jim O’Keeffe in a parliamentary question show:

*54 people went to jail in 2008 for not paying their TV licence.

*This compared to 32 people in 2007, a rise of almost 70%.

*220 people have been imprisoned for the offence over the past five years.

“The deputy said figures Mr Ahern gave him the previous week showed that more than 8,000 people were sent to jail for not paying fines or debts over the last five years.

Almost 1,100 were jailed for not paying debts, including 276 in 2008 — by far the highest over the five years.

More than 7,300 were jailed for not paying fines, including an estimated 1,500 people in 2008.”

There is no government NAMA for those who don’t pay their fines. They can’t even repay by instalment:

“Mr O’Keeffe said the current legislation did not allow the courts to order the payment of fines by instalment.

“This would be say e5 a week deducted at source from social welfare or wages until the fine is paid,” he said.

He said the Government had refused to accept his private members bill proposing such a change to the law.”

Poor people in financial trouble get jail. Nell McCafferty wrote dozens of articles about this in the seventies. Multiple FF governments did nothing - because they were poor. When rich politician investors, bankers, developers and bank investors get into financial trouble they get a massive taxpayer funded bailout. And maybe an inquiry, if we’re patient.
That’s not good enough. Surely €160 million of criminality should result in a sentence. Change the law, change the constitution to introduce retrospective legislation, bring in FBI and NYC investigators to do whatever it takes but this crime is so enormous that it must be punished with at least four hundred jail sentences.

Otherwise we live in an oligarchy and not in a republic where all men are equal before the law.

http://www.thenation.com/doc/20090525/greider?rel=hp_picks

“Politically, I would like to see an enquiry now so it could fulfill Colm McCarthy’s purpose of informing people of the reasons for the current fiscal crisis and austerity measures.”

William Greider in the US is making much the same noises in relation to the banks/government over there. What kind of ‘narrative’ the public are going to use to explain the situation to themselves in a way they are comfortable.

There is a great system in the USA where they have huge convition rates because prosecutors can threaten people with 500 year sentences if they don’t co-operate but give them 2 year sentences with time off if they do co-operate. Roll that dice at your peril! Naturally, the witnesses say whatever the prosecutors want and the prosecutors get to put away a big name. Obviously it is the equivalent of accomplice evidence under threat of death but hey it gets results. We should be aiming to have one million people in jail asap.

Alternatively, we could drop the pretence and go straight for anarchy and street lynchings. We could even bring in witch burning again so women can have their prettier neighbours burnt at the stake out of jealousy.

Although the court process will take some time the investigations themselves can be done swiftly if we commit sufficient resources and engage international experts on financial crime and political corruption. When the investigations - real investigations, not housetrained ones like we are getting now - are out of the way the inquiry into the banks can look at resigning matters, degrees of responsibility and the changes that need to be made, rather than uncovering the full mass of corruption bit by bit.

There is a culture of impunity surrounding our establishment. We need to replace it with a culture of criminal and political responsibility. Out of a mass of human misery and the tens of billions lost we can take some good. Let’s not pretend we will have justice in the future. Doing that will mean we never get it. Lets have justice now.
Investigate them all.

And given an accounting trick that works, you’d be mad to only use it once, eh?

“..if it is to be short-term debt, I can’t believe we still don’t know!..”

Like you, this precisely is what bothers me. I suspect that the Government is hoping to perform the necessary recap on a rapid “in-and-out” basis, but this is unlikely to be possible and, in any event, the recap will have to be more than the minimum required to get the famous “credit flowing”. The ability to raid the NPRF is probably limited so I can’t see how some government borrowing on the bond market can be avoided. And this is on top of continued borrowing to plug the fiscal deficit.

And yet the Government continues to sit on equity tied up in profitable semi-states, much of which has been contributed by consumers over-paying for services received and that yields a return considerably less than its cost of funds. Cui bono?

A convenient ‘truth’? Like a lot of the other ‘truths’ floating around in Ireland over the past year or so. Who’s actually in charge of the PR agenda for FF? I may not like the job they’re doing but they’re doing it well nevertheless.

@Mark Downling - “Maybe Bertie could take a break from…”

A line from an old 10CC track comes to mind….. “I said you got to be joking man.”

On the Minister’s interview - deeply impressive on a personal level. But I note that he again repeated the nonsense that Iceland’s economic collapse was due to nationalising the banking system, rather than vice versa. Can he truly believe that?

Reconstituting the banks, if bondholders agree or can be forced, would limit liability.

Private Equity would want bank disclosure but such disclosure may not be trusted in the context of an imminent wide-ranging inquiry. Nobody seems to trust them about anything else anyway.

You are speculating a bit wildly there about how the new equity will be funded.

Maybe Bertie could take a break from skiving off his EUR100,000+ job - errr… - travelling the globe making important contributions to world affairs and go back to doing sums (has the job changed that much since 1994?)

As I said, the state is already in possession of material information regarding the state of the banks. Presumably each individual bank is in possession of the sections that pertain to itself? If the banks are issuing a prospectus for even a small equity component, they MUST release any pertinent information.

So, the only real conclusion, as you reach it, is that it is extremely unlikely that there will be any public equity sale involvement. I can’t belive that private equity wouldn’t want the same level of disclosure (indeed, it has often looked for higher levels of disclosure - an opening of the books to its analysts), so private equity is unlikely too.

Which brings us solely to the state and the mechanism of payment…

@PH
There’s nothing to stop the state from buying equity stakes with NAMA-type bonds (i.e. directly issued bonds). The banks will still require a level of core cash, I presume, but not all the recapitalisation has to be in the form of increased government borrowing on the bond market.

Which brings us to a dangerous situation. Say 20 bn is required by the banks in NAMA-style bonds and 51 bn in NAMA bonds for the loans. The state now owes the banks 71 bn in short-term debt (if it is to be short-term debt, I can’t believe we still don’t know!). What we know about short-term debt is that it comes due (whether once a year or twice doesn’t really matter). If one or more of the banks go bust, its creditors get its assets. So we could end up with foreign bondholders or interbank lenders owning NAMA bonds and looking for near-immediate repayment (at the next rollover date).

The current setup is directly tieing the survival of the banks into the survival of the state. The millstone is getting heavier…

I don’t believe anyone has suggested that would be the case. Maybe somebody else can clarify.

Thank you. Am I right in thinking that the State’s recap could be financed by the NTMA issuing bundles of short term paper with the State off-loading the equity acquired before, or as, this paper fell due for redemption?

Of course the state will wish to off-load the equity it acquires. It may well wish to get rid of a good chunk of it asap as the ECB and Eurostat are keeping an eye on overall levels of indebtedness notwithstanding the benign interpretation of the rules of the growth and stability pact.