The answer is YES.

Check out the NYLJ for an article on that - its about pari passu.

You can rank payments.

Well, I strongly disagree with O’Toole and his sorry article in the IT. Political change and offering of an alternative is a ongoing process, otherwise it is a coup d’etat.

Paul Sommerville is running for Dublin South East!

http://paulsommerville.com/policies.html

+1 on that!

The whole problem with haircuts for seniors in the absence of a rulebook is a Lehmans type freeze-up as banks wonder who is next among them.

Fair enough to an extent.

But Anglo and INBS are basket cases that don’t exist as banks in any real shape or form - they dont relate to any other bank seeking funding.

Its much harder to say they set a precedent for a functioning bank.

Given that the rest of the political establishment supports the bailout in the name of realpolitik, when Ireland defaults the whole political model will be broken and not just FF. SF are the only ones talking sense.

Fintan O’Toole was in the Irish Times yesterday saying that there wasn’t enough time to come up with an alternative political offer but in reality I think they are waiting for the next government to collapse .

I know in this state its difficult to comment on SFs policies but any thoughts?

Michael Lewis made a guest appearance on Marian Finucane today ….. wonder was anybody listening?

http://www.ntma.ie/ELGScheme/GuaranteedLiabilitiesbyInstitution.php

It’s a loophole in the system which the ECB seems to allow for the moment. I believe it is being used in this situation to replace Sterling/UK loan books which are no longer eligible at the ECB from the start of this year, as only Euro-denominated collateral is now accepted. It is a defacto creation of quasi-quantitative easing, albeit they won’t admit to it.

Oops, i was a bit vague there alright! No, INBS is 4bn, but the others have more or less done the same thing this wek for a total of 16.5bn. I think there may be some fudging going on with the “marketable instrument” definition for the INBS (and this) stuff because of the ELG backing it up, but given that its a sovereign packed secuity, whats the real difference between ECB and ELA, we’re on the hook either way? Anyways, i think the final days of that particular blackhole of an institution are soon approaching, so don’t think its that much of an issue.

What are the requirements for having a banking license in Ireland? (Is being solvent a non-negotiable requirement?)

Or do you mean that they will issue a new 16.5bn?

I don’t believe the INBS debt would be eligible for the ECB since it is not a marketable instrument, as such it would be used for ELA underpinned by, yes, that would be us, the taxpayers…

What needs to be presented for senior debt is the furtherance of this imaginary liquidation. The calculations need to be made public - what assets of value does Anglo have net of debtor-in-possession financing, what liabilities does it have, what order do those liabilities need to be satisfied in.

Then share the assets out between them.

Where the state has guaranteed liabilities, as debtor in possession, it can use its previously committed resources to make those debtors whole.

Unsecured debtors would then get a haircut on their payout commensurate with the bustness of Anglo, plus a bit for going with good grace.

This is basic Chapter 11 stuff.

The problem, it seems to me is two-fold:
1. It would require a level of disclosure that so far has been shrouded in the spoof of ‘commercial confidence’. It would require that assets are named and quoted at market price, not some imaginary NAMA price. It would, in effect, require price discovery in the market for bank assets. It would also require an admission of the scale of Anglo’s debts (other than senior and deposit).
2. For the ‘imaginary’ liquidation to be effective and reasonable, the chain of liabilities has to be fairly worked through. This has not happened in the other banks… so far. AIB retains a rump of private shareholders so the government is an investor, not a debtor in possession. It is not free to attempt to bitchslap anyone given its unwillingness to start at the beginning.

I believe 1 is an unsurmountable obstacle to the current consensus. 2 appears likewise in relation to banks other than Anglo and INBS.

I understand that the first €100 000 is covered under the original deposit insurance - so the never did start out with equal claims - after that it’s just too bad”

The equal claims referred to is in the context of a winding up. The depositors and senior unsecureds are usually pari passu (in a winding up, but also apparently in Lenihan’s imagination, in all ways possible including favourite rap artist)

They have equal claims on the assets of the bank. As an investor, I would regard the 100k deposit guarantee and the ELG unlimited guarantee as both state guarantees. You will be regarded as defaulting if you stitch up these depositors - so get plan B for the structural deficit out of the cupboard and stop keeping it sectret - or people like me will know it doesn’t exist.

I understand that the first €100 000 is covered under the original deposit insurance - so the never did start out with equal claims - after that it’s just too bad

Law and order, plámás, free and democratic society. Taking side of poor people.

*Economy too important to be left to economists*.

Secure stable homeland of civilized people . Troublemakers. Stand up for country. Exhausted my life for this country. Hard times, war, one people one nation the right direction and course so long as we set goals right. The rule of law. More democracy, more freedom. New steps. The same shite. Reduce unemployment, raise standard of living. Embrace consciousness and struggle. Fearing for Egypt and future. Further chaos mayhem destruction so trust me . Requested govt to step down today. New govt tomorrow. Shoulder new priorities. Safety and security of all Egyptians. God save Egypt.

It is also surely the case that the bank run which has been in progress for a while now has been brought about by fears about the solvency of the State, and that those fears were heightened by the original bank guarantee, which means that Bini-Smaghi has things precisely backwards.

….’ because it is really so blatantly unjust that the people should absorb all the losses and the bondholders get away free’…. - G. Soros on Ireland here:

http://video.ft.com/v/764176285001/Soros-Ireland-must-restructure-now

Mr. Dukes - get your act in order please.

“…there is no reason to believe that it will not remain sensitive…”

I feel like Irish banks are stuck in a Beckett play!

I have a problem with this statement. The time for Irish banks has remained sensitive for well over two years and the way things are going, there is not reason to believe that it will remain sensitive some 2013 or 2014.

There is never a wrong time to do the right thing.

It wouldn’t surprise me if there are actually no unguaranteed deposits at all. (If there are the depositors concerned must be nutcases.) But if there are none, then the problem, which Karl Whelan refers to, simply doesn’t arise. If any such depositors do exist then it’s their tough luck, say I. That’s all I meant by my comment; I wasn’t proposing that guaranteed deposits should be shorn. It may come to that eventually of course, if we continue to let the situation deteriorate.