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3 Responses to “Limited Bank Debt Deal Would Help Bailout Exit, says OECD Economist”
“Ireland’s government was allowed to skip a cash payment of about€3.1 billion on the notes in March thanks to a one-off refinancing deal” which is not strictly accurate is it?
And he also suggests this at the end:
‘“The banking system has been recapitalized and it can’t move on until these non-performing loans are resolved,” Mr Haugh said. “And they are going to have to make some hard choices. It is going to be tough for banks and it is going to be tough for society in Ireland. Some people are not going to be able to remain in their houses, unfortunately, because people have taken out loans that they are never going to be able to repay when you do the maths.”
‘Solutions could involve banks converting never-to-be-repaid home loans into tenancies, he said, adding it was vital that “intolerable” burdens for home owners is tackled.
‘“It will have to be done in an imaginative and big enough scale because we are talking about a macro-size proportion. I think it is something that can’t be ignored. The banks have enough money to do this,” Mr. Haugh said.’
It kind of sort of is accurate in a way, in as much as although a cash payment was made, there was at the same time, additional borrowing on a one year term, from BOI. He doesn’t say the refi was from the official sector.
So the state’s cash position wasn’t altered.
The loan could be doubled next year, rolled over, or not rolled over – in which case 2 repayment sized chunks of cash could be required in one go.