Just off the phone with the DOF there who assure me that long-term interbank deposits ARE also covered under the announcement yesterday.

Really difficult to get that from the announcement though.

But all debt liabilities (bar deposits) covered post September 29th still have to have been issued during the ELG?

No, long term interbank deposits are not covered.

‘as bad as politics.ie’

Politics.ie is a good website and a shockingly open forum on this benighted isle. So where to next for you? Dusty journals? The internet stratosphere?

http://finance.gov.ie/documents/pressreleases/2010/notesfored.pdf

Instead of hi-jacking KW’s thread any further, I decide to hi-jack on Richard Tol’s for a little while instead! BOH.

http://www.irisheconomy.ie/index.php/2010/09/07/hot-air-over-poolbeg/#comment-71233

So now we have a guarantee on short-term interbank deposits but not for longer-term ones?

I mean none (of any length) were going to be guaranteed after Sept but now we have approved an extension for short-term ones???

Have I read that wrong or are interbank desposits now guaranteed the same as senior debt?

He is a bit too ‘top-down’ for my liking and I’m not clear how the resources (though not huge when compared to global GDP) he reckons are required would be marshalled and applied.

Speaking about top down, I was very interested to listen to Conor Shekan’s views, head of the school of spatial planning in DIT, on a webcast recorded back in 2009. His view was that we have received an opportunity in Ireland to re-organise ourselves to provide for a better society and plan accordingly, due to the recesssion. His argument in the webcast makes a lot of sense. I was interested to see his argument, that we need to drive decisions from the regional back down through the smaller levels, and finally back down to the level of urban councils. Skehan argued that in eastern region of Ireland at the moment, it operates the other way around. Clearly, in light of the arguments about the Poolbeg situation etc, what we do see clearly is a city council driving decisions which will affect an entire region’s development over an extended period of time. Conor Skehan’s talk is only about 30 mins in three parts and is well worth a listen. BOH.

http://www.thefuturesacademy.ie/videos

Also, breaking headlines, unconfirmed but decent enough to hit Bloomberg, that EU has approved extention of Irish g’tee to cover all short term interbank and corporate deposits until 31 Dec 2010.
[/Quote]
Revealed in Tribune last week, along with the O’Hagan stuff:
It is understood finance minister Brian Lenihan is leaning towards extending the original bank guarantee to the end of the year for debt and deposits not covered by the ELG.

This would keep vulnerable short-term corporate deposits and senior unsecured debt under state protection – and buy the government time to bring its two guarantee policies into alignment from January.

“It would be arbitrarily putting ordinary creditors e.g. the amount due to the landlord of the office building - - above debt to bondholders.”

Not necessarily so. Surely the more appropriate comparator for the treatment of the holders of sub debt is the position of the shareholders, not trade creditors. The mooted legislative amended would value sub debt on the assumption / legal fiction that no further government support would be forthcoming. Anglo would be insolvent without the constant injection of funds by the government, and in such a scenario the statutory compensation would be nil. The fact that Anglo might have paid other trade creditors day-to-day expenses, e.g. rent, could be justified on the basis that same were necessary payments to keep the bank running. Certainly it would be difficult to argue that such payments constituted a “fraudulent preference”.

I haven’t read Lomburg’s latest opus, but there has been considerable media coverage. He is correct about the huge global challenges that exist in addition to climate change, but he may be banging on about these to cover/justify his change of view that climate change should be higher up the list of priorities than he thought previously. He is a bit too ‘top-down’ for my liking and I’m not clear how the resources (though not huge when compared to global GDP) he reckons are required would be marshalled and applied.

I’m more for ensuring ordinary citizens have access to resources and are empowered to make choices. If they mess up, they’ll learn.

Excellent idea. We could use the 1916 centenary jolly to celebrate the full transfer of monetary and fiscal sovereignty and much of economic sovereignty to the institutional EU.

The other general point that Lomberg seems to return to time and again - and it is a very similar point to take made in relation to banking bailouts in Ireland - is that climate change only represents a percentage of the total problems facing the globe in 2010 and far beyond. I suppose that is another very useful part of Lomberg’s new book, which might interest many of the Irish Economy commentators here. How do we deal with a situation in which one particular issue - be it climate change, or a financial meltdown - monopolises all of the attention and resources of a society? I heard a comment last weekend for instance, that unless the media had the banking crisis, what would they talk about? One of Lomberg’s examples was a citizen who was willing to donate €10 to help combat climate change. Say about €2 worth of the €10 actually ends up being spent to achieve something useful - would it not be more worthwhile spending €10 to combat some problem facing the world - where we could get €10 worth of return? I think the same argument applies to the banking crisis in Ireland. And because politically, or economically, solving the banking crisis makes us feel good about ourselves, or whatever - how much value out of that €10 are we lightly to get? BOH.

Ironically the Pontius Pilate like behaviour, last week, by Mr Trichet regarding Anglo may also, IMHO, turn out to be a blessing in disguise.

By placing placing the “Anglo problem” firmly in the domestic Governmentś court the ECB may have offered the opportunity to Ireland to argue for an extension of the public finance deficit reduction period out to 2016.

Well, the capital program is not unscheduled.
The rollover of short-term debt is not unscheduled (except in the fact that a date hasn’t been set).
NAMA must have some idea of whether it will make its coupon payments from cash-flow - it operated under the aegis of the NTMA, so I don’t see how it should come as a surprise there either.

As to guessing, it has been a great basis on which to operate for the last three years or more. Guesses are malleable, open to the facts, arguable. Opinions, generally are not.

So it is not my opinion that the NTMA are not telling the truth, therefore belief/disbelief doesn’t come into it. I’m guessing they’re operating under the same pressures as the rest of the state, viz. the need to put a positive glas on any statements they make and refute the tone of any negative statements that others make.

its in a graph as opposed to a table, but here’s what it looks like (didn’t print it off and crack out the ruler!)

INBS 4bn (refinanced yesterday apparently)
ANGL 6.25bn
EBS 1.25bn
ILPM 3.5bn
BOI 4.5bn
ALBK 7bn

Dont think any of it is sub (not 100% sure on that though, certainly doesn’t look like AIB, BOI or ANGL have).

@ Hogan

you can either believe the NTMA or not, your call. Obviously a cash situation cannot take account of any currently unscheduled cash requirements, as that would basically amounting to guessing, which is never a great basis to form an opinion.

Can’t access the Davy note due to a paywall but did it (or anyone else) do a breakdown on what is owed before Sept on a bank / debt type basis?

All I know is Irish banks have €26bn due but not a per institution breakdown.

Also, Anglo apparantly have €2.5bn worth of Sub Debt due but not sure how much is due from the other banks.

*BANK OF IRELAND OFFER FOR CANADIAN DOLLAR LOWER TIER 2 NOTES

It is connected in the sense that all things are connected, but, even with EU-wide targets on GHG emissions and tighter EU-wide fiscal governance in the future, individual member-states will continue to have discretion as to how they finance - or facilitate the financing of - emission reductions. This will involve a shift from the taxation of productive labour (a ‘good’) to the taxation of land (where rents are earned) and that of carbon emissions (a ‘bad’). And yes, what the EU is driving is wrong-headed and likely to be expensive and ineffective, but this is separate from the issues being discussed here.

I’m not convinced by this from the NTMA. http://www.ntma.ie/NationalDebt/compInstruments.php

As at 30 June 2010, there was 20.5 bn in cash on hand, as they say enough to finance the deficit through to Q2 2011. However, 8 bn of that is short-term. It can’t all be nine month or above duration. So there is a refinancing requirement to maintain existing cash balances.

Note that the deficit excludes any cash payments required by the banks (other than promissory notes, NAMA bonds), and top-up NAMA needs to pay its coupons, any spend in the capital program…

“I am open to correction, but it occurs to me that a similar approach to the holders of subordinated debt would not fall foul on any rule against retrospectivity…”

It would be arbitrarily putting ordinary creditors e.g. the amount due to the landlord of the office building - - above debt to bondholders.

These sometimes inconvenient laws are the bulwark of the modern economy.

There has already been a liability management exercise with Anglo sub debt.

I assume they are waiting on the on EU judgment on Anglo and posssibly the expiry of the guarantee on dated sub debt before cleaning up the rest of the debt, whether thats an LM exercise or “torching” them well thats another issue