Author: Karl Whelan

Fine Gael Health Plan

Having been critical of Fine Gael’s “stimulus” plan a few weeks ago, I thought I’d be fair and note that FG’s new health plan — with Dutch-style universal private health insurance as its centrepiece — strikes me as a useful contribution.

With increasing funds for the health service simply not possible over the next few years, we need to figure out how to run our health system in a far more efficient way, and this proposal suggests one way of going about this.  Then again, I’m not at all an expert in health economics.  I’d be interested to hear from those who are about what they think of this plan.

Calculated Risk on Liquidity and Solvency

The invaluable Calculated Risk has a couple of very useful posts on the analytics of bank solvency and liquidity here and here.  The discussion is framed around current US policy but is still very useful reading for those looking for a starting point for understanding the issues facing the Irish banks.

Monetary Policy and the Irish Central Bank

On last night’s Prime Time report on quangos and inefficiencies in the public sector, reporter Donagh Diamond said:

The introduction of the euro abolished a major function of our central bank, the devising of monetary policy.   So we wondered where all the staff went.   Remarkably, the CB tells us that on the creation of the euro “The functions of the CB remained largely the same” clearly indicating that no staff went anywhere. 

As a former employee of the Central Bank, I have regularly had this point put to me over the past number of years—“What does the Central Bank do now?”    But this question, and Donagh Diamond’s comments, are based on a highly flawed understanding of how the ECB’s monetary policy operates.  

Continue reading “Monetary Policy and the Irish Central Bank”

NAMA Website

There may not be any legislation yet but NAMA has a website.  It provides an example of how NAMA will buy loans from the banks using a “purely illustrative” example of a 25% discount.  It has been widely reported that AIB would be selling €30 billion in loans to NAMA.  A writedown of €7.5 billion would wipe out essentially all core Tier 1 (shareholder) capital, so this is an interesting illustrative example.

Update: Patrick correctly points out that the illustration is of a €25 million writedown of a €65 million loan for a property originally worth €100 million.  So indeed it’s a 38.5% discount. I know it’s just an example but it’s interesting all the same.

Jim Corr on the Financial Crisis

Those interested in keeping up with the latest thinking on the financial crisis may be interested in checking out Jim Corr’s interview with Matt Cooper on today’s Last Word radio show.