Ivan Yates is singing my song.

Ivan Yates wrote “It’s time we pleaded inability to pay for dead banks and risky businesses.” in the Irish Examiner on 8th April. He echoes my conclusions about Anglo Irish Bank and Irish Nationwide Building Society. I will quote Ivan below –

“Last week’s recapitalisation of AIB and Bank of Ireland (BoI) may transpire to be unduly optimistic. BoI is set to raise €2.7bn privately. The NAMA bad loan transfers were reduced from €16bn to €12bn. The bank will have to nurse these loans. It seems bad debt provision is being minimised to avert state majority share holding. They may be back in several months for more state cash and resultant nationalisation.

AIB may have overvalued its Polish and American bank assets resulting in a further state cash call. Non-NAMA losses in Nationwide and EBS still may be underestimated. Any spare state finance will need to be kept for genuinely systemic banks. We cannot preclude another round of recapitalisation. The woes of Anglo, DDDA, Quinn Group and Nationwide are primarily about facing up to insolvency. The Government has offered unlimited protection to underwrite these liabilities. This emperor has no clothes. It’s now time to change course. We have reached the point where the solvency of the sovereign state is in jeopardy. We must plead inability to pay. The cure is worse than the disease. The “least worst” option is to allow market forces to prevail.”

Bill’s comments – The latest (unfortunately NOT unbelieveable) development is that Anglo Irish Bank is to invest €700 million in the Quinn Group of companies and become the majority shareholder. OMG! What is the state nationalising the Quinn Group for?

The psychology of this government is obviously very timorous with regard to the financial establishment here and in Europe. An inferiority complex is no asset for leadership. The sooner we get Fianna Fail and the Greens out of office, the sooner somebody who will put the state first will stop the rot.