Reflections on the Irish Business Class - CPI Public Meeting, 29 March 2014

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Presentation at the Communist Party of Ireland event, "We All Partied? They Partied, We Paid". Connolly House, 29 March 2014.

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Reflections on the Irish Business Class - CPI Public Meeting, 29 March 2014

  1. 1. DREAM…
  2. 2. INNOVATION
  3. 3. NAMA PROPERTIES = c.16,000
  4. 4. “The problem here is that, when one looks at the top 190 debtors in the NAMA universe with debts of €62 billion, a relatively small number of people were chasing the same assets and it was like a Ponzi scheme. They overborrowed and were overlent to by banks. There was huge inflation of asset values and this was not sustainable in the context of the economy. There was a disconnect between the economy growing at 8% or 9% per annum and lending by banks growing at 35% or 40% per year. The problem was caused by overpaying for assets.” Brendan McDonagh, Chief Executive, NAMA, in evidence to the Public Accounts Committee, 26 October 2011
  5. 5. Irish Executives in the six lenders must have been rubbing their hands with glee as the State-sponsored €400 billion insurance policy covers commercial, institutional and interbank deposits, and investors who have bought some of their debt. The State guarantee allows the six lenders to borrow more freely and more cheaply for short-term funding that had become scarce due to the global credit crunch.
  6. 6. Mr. Lenihan said on Tuesday that the increase on the cap on deposit guarantees up to €100,000 from €20,000 last month covered 97 per cent of customer deposits so the guarantee has clearly been included for the benefit of the banks rather than the savers…
  7. 7. “Denis Casey, chief executive of Irish Life and Permanent, said the guarantee would allow Permanent TSB and the other Irish banks covered to borrow more cheaply. “The oxygen supply for Irish banks was being cut off and healthy banks were starting to gasp for breath. This guarantee turns on the oxygen supply.”

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