Category: Banking Crisis

On last night’s Prime Time, Brendan Keenan argued that it didn’t matter much how the government dealt with the problem of bad loans at the Irish banks, as long as they got on with doing it, though he noted he would be very reluctant to nationalise.  Similarly, David McWilliams said that the key thing was to do something to deal with the bad assets and that it doesn’t matter whether we nationalise or not, i.e. that we needed to produce cleaned-up banks and it didn’t matter who owned them.

Let me explain why I think it does matter how we go about this and who owns the cleaned banks. 

Today’s Irish Independent reports that Peter Bacon has delivered his report on bad bank and risk insurance proposals to the Minister for Finance:

The Government has been advised to set up a ‘toxic debt’ company to take over billions of euro worth of bad property loans from the banks.

I’ve written quite a few times about the bad bank proposal and don’t want to repeat myself.    Still, it’s worth clarifying a couple of the nuances in the article because it likely illustrates the spin that the government would use to justify such a plan should it be adopted.