The Funding of the Irish Domestic Banking System During the Boom

The revised version of the paper I presented at SSISI is here.

4 replies on “The Funding of the Irish Domestic Banking System During the Boom”

Re: Important piece of research work

Few in Ireland, unfortunately, I think appreciate the value of such research work as this one. That is, for the purposes of going about our work of piecing together the much large jigsaw puzzle, or picture, that can give to us an idea of what happened in Ireland during the boom.

I have something additional things I wish, having read Philip’s paper in full, and which I think I will try to add by way of comment later. But I would like to share a short quotation, from George Soros from 2011, when he spoke at a ‘Hayek’ debate seminar at the Cato institute in America, with law professor Richard Epstein and Bruce Caldwell, an economic historian.

Soros, who was trained at the London school of economics in the 1940’s, remember a time, when two sides of a furious debate engaged in an argument – that of Karl Popper and F. A. Hayek. Soros remembered, ‘I had read his [Karl Popper’s] book, The Open Society and it’s Enemies, in which he argued, that the incontrovertible truth is beyond the reach of the human intellect. Ideologies that claim to be in possession of the ultimate truth are bound to be false. Therefore, they can be imposed on society, only by repressive methods’. BOH.


I agree!

Also in relation to Popper as history has an unfortunate habit of repeating itself. Popper, at least, can lay claim to insights which have stood the test of time.

On the general issue of inter-bank lending, to someone not familiar with the technicalities, the cry “faites vos jeux, rien ne va plus!” comes to mind. The roulette wheel came to a shuddering halt with, its seems, mainly UK and US players still at the table.

I was fortunate enough to attend Philip’s excellent lecture which clearly showed entry by Ireland to the euro zone opened up access to the global bond market to the Irish banks. Also the Irish banks borrowed extensively in the sterling and dollar bond market. Paul De Grauwe’s 1998 FT article is vindicated by these metrics.

Forgive me if I be overly self indulgent and name drop a lot:
I was also fortunate forty years ago at the London School of Economics ,to attend a lecture by Hayek on his book “The road to serfdom”. Although I never met Karl Popper, a fellow colleague of mine Michael Maertes at Passfield Hall, an LSE student accommodation residence was invited to his home for dinner. Michael subsequently became political adviser to Helmet Kohl from 1987 to 1998.

Compliments again on research work

I eagerly sat down, to fully read Philip’s paper early this morning. I realize now that it does take a very different view point, on the history of the 2000’s in economics, than many other research has done.

This change of viewpoint, I think, is what is so valuable about the work.

It prompted me to also write down several items yesterday evening, which I will compose into a properly written multi-page, full rebuttal to Philip’s research. But for now, I think that another George Soros quotation might suffice. BOH.

“The methodological discussion between them [Karl Popper and Frederick Hayek in the 1940’s at the London School of Economics], was very enlightening. I was influenced by both of them, and I also found fault, with both of them. I should like to emphasize that by identifying Hayek’s inconsistency, and political basis, I don’t mean to demean him – but, to improve our understanding of financial markets and other social phenomenon.


The political controversy, and the role of the state in the economy, is raging in full force today. But the standards of political discourse have greatly deteriorated since the articles in Economica [a publication where Soros read articles published by Hayek and Popper opposing one another, during the 1940’s].

At that time, the two sides engaged in illuminating arguments. Now they hardly talk to each other. That’s why I was so pleased to accept this invitation, to the Cato Institute. As I see it, the two sides in the current dispute, have each got hold of one half of the truth, which they proclaim to be the whole truth”.

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