Categories Banking Crisis Competition policy Economics Bailing out the banks: Reconciling stability and competition Post author By Philip Lane Post date February 18, 2010 9 Comments on Bailing out the banks: Reconciling stability and competition There is a new CEPR report on this topic – this VOX column provides a summary. Related Tags bank bail outs ← Pettis on Europe (and China) → Globalisation, international financial integration and the financial crisis: The future of European and international financial market regulation and supervision 9 replies on “Bailing out the banks: Reconciling stability and competition” @Philip Lane Speaking of bailing out the banks. “Names of top 10 borrowers in first wave of Nama transfers revealed” http://www.irishtimes.com/newspaper/frontpage/2010/0218/1224264715434.html This is another list. http://www.irishtimes.com/newspaper/finance/2009/1009/1224256256882.html 3 names on both. Gerry Gannon, Gannon Homes and Co-owner of K Club, Joe O’Reilly, Dundrum Shopping Centre, Paddy McKillen, Jervis Shopping Centre. @ALL For the politically minded. Courtesy of poster Iarmhi Gael on another forum: He said he supposed he was going a bit too far when he said it. Looks like he made no mistake on that. From The Limerick Leader. http://www.limerickleader.ie/video.aspx?VideoPath=LIME/WillieODeaTape.mp3&VideoID=0&ArticleID=6084787 Article by Green Barrister. Very strong. http://www.irishtimes.com/newspaper/opinion/2010/0218/1224264713504.html @Moderator That should have read: Ryanair have thrown down the gauntlet to Brian Cowen and Mary Coughlan. Need registration to read this: http://www.americanbanker.com/specialreports/175_3/banks-cool-to-brokered-deposits-1014502-1.html Brokered-deposits seem to lead to: “To justify the higher cost of funding with brokered deposits, he said, a bank must take on higher-risk credits. To do that successfully requires underwriting capabilities that few community banks possess.” Irish banks sold bonds to finance their growth, they didn’t go for brokered-deposits. Other than that I think it might be possible to say it seems similar. Struggling to stay on piste – in the face of avalanches from Limerick and Dublin Airport – but the Competition Authority published a report on non-investment banking services towards the end of 2005: http://www.tca.ie/images/uploaded/documents/banking%20report.pdf which included 25 behavioural recommendations. Not sure to what extent they were implemented – or even if they’re still relevant. The VOX column seems to focus on structural remedies and, in the context of bank resolution in Ireland, these should be on the agenda here. But the pressing issue seems to be the solvency of the covered banks and it doesn’t seem to matter if bank customers get hosed in the process. @Paul Hunt The civil society rebellion gathers pace. From RTE: “Meanwhile, a Green Party activist has now made a formal complaint to gardaí about the actions of Minister O’Dea. Gary Fitzgerald told RTÉ he made the complaint in the Bridewell Garda Station in Dublin, claiming that the discrepancy between Mr O’Dea’s sworn statement to the High Court and the transcript of his earlier remarks to a newspaper reporter indicated that perjury had been committed.” http://www.rte.ie/news/2010/0218/odeaw.html @Moderator Ryanair backs up here: http://www.ryanair.com/en/news/o-leary-invites-tanaiste-to-meet-on-300-jobs And here: http://www.ryanair.com/en/news/ryanair-s-proof-of-its-maintenance-only-plan-for-hangar-6 What they say here: http://www.ryanair.com/en/news/taoiseach-and-tanaiste-have-mislead-the-dail @Tony Demello I welcome this but it puts the GP in a ludicrous position. They voted confidence in a minister THE DAY BEFORE one of their leading members lodged a formal complaint to the Gardai about the matter that led to the confidence vote. All that has happened since yesterday is that the audio version of O’Dea’s comments has been released. Fitzgerald, by doing the right thing, has destroyed his own party’s credibility. Cant wait to see Eoin’s response to Oliver Vandt and Tony Demello having a conversation, even if its nothing to do with the topic in question 🙂 Anyways on topic…. Stability isnt necessarily a desirable state for other sectors… For example, there was no mention of the need for stability in the tech sector during the dot com bomb nearly 10 years ago…Back then Microsoft were getting too big for their boots; and the competition authorities in the US and EU stopped them embedding Internet Explorer in their desktop operating systems because they had no competition. Now Microsoft are still a hugely successful company, they still dominate the desktop but not as much, technology and the presence of new incumbents present nes challenges to competition…. Whats the point? Well the “too big to fail” rule doesnt apply in almost every other industry. So why is it prized in the banking industry to the detriment of competition? Great title for the post, stability and competition are opposing forces; if you let stability win, you end up with rigged markets. @Garry It’s very hard to find intelligent people to talk to these days. Thank God for Tony… @Oliver I quite agree. For the political: O’Dea’s resignation letter and Cowen’s reply are here. http://thestory.ie/2010/02/18/willie-odeas-resignation-letter/ O’Dea says he resolutely refutes all the accusations made against him. He could have chosen to express his sincere regret for slandering an opponent and (unintentionally) misleading a court. He didn’t do so. He could have said that was his reason for resigning. He didn’t do so. Instead he gives as his motive for resigning the distraction he is causing to the government’s work. I completely believe him. A lawyer who slanders opponents and (unintentionally) misleads a court and resigns thinking he has done nothing to deserve losing office. That it’s all an empty political row. We really are a failed technocracy/entitled aristocracy. The legal qualifications are just gold paint on the thick brass neck that lies beneath. “I resolutely refute the accusations made against me, against ME, AGAINST MEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE…….” Well done to Eugene O’Regan. He is the first Oireachtas representative of the new Ireland. Comments are closed.