A bird's eye view of the vineyard
Mohamed Bin Salman?s Do or Don?t Dilemma Thu Oct 19, 2017 05:12 | The Saker
by Ghassan Kadi Much has been said about the Saudi Crown Prince Mohamed Bin Salman (aka MBS), and most of it, has been in the form of criticism from different
Socialism, Land and Banking: 2017 compared to 1917 Thu Oct 19, 2017 05:07 | The Saker
by Michael Hudson Socialism a century ago seemed to be the wave of the future. There were various schools of socialism, but the common ideal was to guarantee support for
Syria War Report ? October 18, 2017: Government Forces Cross Euphrates, Push Toward Omar Oil Fields Wed Oct 18, 2017 17:02 | Scott
https://southfront.org/syria-war-repo... If you?re able, and if you like our content and approach, please support the project. Our work wouldn?t be possible without your help: PayPal: firstname.lastname@example.org or via: http://southfront.org/donate/ or via: https://www.patreon.com/southfront The Kurdish-dominated Syrian Democratic
Syria-Iraq War Report ? October 17, 2017: Peshmerga Retreating From Contested Areas In Iraq Wed Oct 18, 2017 16:58 | Scott
https://southfront.org/syria-iraq-war... If you?re able, and if you like our content and approach, please support the project. Our work wouldn?t be possible without your help: PayPal: email@example.com or via: http://southfront.org/donate/ or via: https://www.patreon.com/southfront The Syrian Arab Army
Stand for the Truth: A Government Researcher Speaks Out | 9/11 Evidence and NIST Wed Oct 18, 2017 15:09 | The Saker
The Saker >>
Repeal or Replace? Tue Oct 03, 2017 06:31 | Fiona de Londras
An Abortion Law Immune from Constitutional Review? Thu Sep 28, 2017 20:14 | Fiona de Londras
Should the pro-choice movement support a new constitutional provision on abortion? Wed Sep 27, 2017 16:19 | Eoin Daly
Replace v Repeal and the Politics of Legal Certainty Thu Sep 21, 2017 10:57 | Máiréad Enright
Ireland?s violation of International Abortion rights: A perpetual Déjà vu. Sat Jul 29, 2017 18:49 | admin
Human Rights in Ireland >>
For lefties too stubborn to quit
Being a Leftist 11:45 Thu Oct 19, 2017 | WorldbyStorm
Signs of Hope ? A continuing series 10:33 Thu Oct 19, 2017 | WorldbyStorm
Closure of post offices and other resources? It?s not the State to blame, it?s right wing government... 07:43 Thu Oct 19, 2017 | WorldbyStorm
The RDS on Saturday?. 21:08 Wed Oct 18, 2017 | irishelectionliterature
Catalonia and other matters. 17:32 Wed Oct 18, 2017 | guestposter
Cedar Lounge >>
Life should be full of strangeness, like a rich painting
Notes for a Book on Money and the Irish State - The Marshall Aid Program 15:10 Sat Apr 02, 2016
The Financial Crisis:What Have We Learnt? 19:58 Sat Aug 29, 2015
Money in 35,000 Words or Less 21:34 Sat Aug 22, 2015
THE WRATH OF KANE: BANKING CRISES AND POLITICAL POWER 09:32 Fri Jan 30, 2015
ALWAYS THE ARTISTS: WEEK THREE OF THE BANK INQUIRY 23:11 Thu Jan 22, 2015
Dublin Opinion >>
The Recession, Bank Bailout or our Deficit?
Tuesday May 01, 2012 09:27 by Sonya Oldham - The People's Association Watchdog irelandpaw at gmail dot com
Does the Fiscal Compact Treaty Deal with the Cause of the Crisis?
Does the Fiscal Compact Treaty Deal with the Cause of the Crisis?
What Caused the Crisis? The collapse of the Irish banking system was principally caused by a failure of regulation and the reckless lending practices of the Irish and European banking system.
According to the Banking Enquiry: Financial integration in the euro area allowed banks in Ireland unprecedented access to cross-border funding. As in many smaller EU economies the entry of foreign banks intensified competition in lending. The banks’ ability to borrow cheaply in international wholesale markets created a ‘capital flow bonanza’ which has been observed to markedly increase the likelihood of a banking crisis within the receiving country. This clearly happened in Ireland.
According to the Assistant Director General, Financial Institutions Supervision, Central Bank of Ireland:
In the 2000s, it is clear that the low ECB policy rate facilitated the growth of property prices in Ireland.
There was also no direct regulation of credit limits, for example through restrictions on LTV ratios. This meant that Irish households were able to accumulate liabilities more easily than consumers in countries where there was stricter regulation. A contributing cause of the crisis was that bank governance and risk management were weak – in some cases disastrously so.
It appears that internal procedures were overridden, sometimes systematically. There is a need to probe more widely the scope of governance failings in banks and whether auditors were sufficiently vigilant in some episodes.
According to the Banking Enquiry: These supervisory problems must be seen in conjunction with the absence of forceful warnings from the central bank. However, the IMF’s major Financial System Stability Assessment of 2006 also did not sound the alarm.
According to the Assistant Director General, Financial Institutions Supervision, Central Bank of Ireland: A striking lesson of the global banking crisis is the danger of allowing banks to operate to free market principles within free market economies.
Did Ireland overspend?
According to Paul Murphy MEP: This is simply not the case. In 2007, Ireland’s debt to GDP ratio was 24.8% (Eurostat) - far less than the 60% dictated in the Fiscal Treaty; our general budget was in surplus of 0.1% compared to a target of a deficit of 3%; and our structural balance was estimated by the EU Commission in spring 2008 to be in surplus of 0.2% compared to a target of a maximum deficit of 0.5%. Later on, the structural balance was revised downwards, with the Commission in 2011 saying that Ireland had a structural deficit of 1.4%. So having the strictures of the Fiscal Treaty in place would not have meant we avoided the economic crisis. In fact, the government would have been congratulated on having met the targets so effectively and with such high growth rates! The same is largely the case for Spain and Portugal, which had relatively low levels of public debt in advance of the economic crisis.
How Much is the Bailout Costing?
Bond payments September 2008 to April 2012 were €103.7bn
Bond payments from April 2012 onwards: €40.6bn
TOTAL BOND PAYMENTS (according to Michael Noonan): €144.3bn
THE COST: So far, according to Mr Noonan, the bank recapitalisation is €62.8bn (Anglo/INBS €34.7bn; AIB/EBS €20.7bn; BoI €4.7bn; IL&P €2.7bn). Given that according to Mr Noonan these banks still have over €40bn to pay, there is a good possibility we may have to recapitalise again. Also, this figure does NOT include interest lost on the money taken from the National Pension Reserve Fund, nor the interest we’ll have to pay on the borrowings needed to fund all that recapitalisation.
So we can see it was the bank and bondholder payouts that caused our deficit to take a downward spiral so will the Fiscal Compact Treaty be effective?
How can it when it does not deal with the cause of the collapse. The fiscal treaty, if it had been in place, would have been ineffective in preventing this recession as our country was within limits. This is not a crisis caused by government overspending, this is a crisis caused by the lack of financial regulation within Ireland and the EU. Todate we are still living with the moral hazard of the fiscal sector.
According to many leading economists this treaty will in fact make matters worse:
Roubini Global Economics: “In our view, the terms of the fiscal compact require a fiscal adjustment by most Eurozone countries that will significantly undermine their short-term growth prospects. If the treaty is not enforced, it will be positive for Eurozone growth prospects and therefore for fiscal sustainability.”
Vote No to the Fiscal Compact and Demand real solutions to this crisis!
The People's Association Watchdog; www.paw.ie; firstname.lastname@example.org