Government set to recapitalise the banks

Image via WikipediaThe Government has finally decided to recapitalise the banks to the tune of €10 billion in a statement from the Department of Finance released tonight.

The Government has today decided on an approach to the recapitalisation of credit institutions. The Government’s objective is to ensure the long-term sustainability of the banking sector in Ireland and to underpin its contribution through the availability of credit to individuals and businesses in the real economy. This initiative will help to foster and encourage the flow of funds to the economy, and limit the impact of financial market difficulties on businesses and individuals.

My question is, can we afford this recapitalisation? Gerard O'Neill of Turbulence Ahead has an excellent post pointing out the fact that Ireland is one of a few countries facing the possibility of Sovereign Default. The others are Belgium, Denmark, Luxembourg, Switzerland, Sweden, the Netherlands and the UK. Will this announcement make it worse?

The Government will use the National Pensions Reserve Fund to recapitalise the banks. This will be done through the purchase of "preference shares and/or ordinary shares and the State may where appropriate participate on an underwriting basis." Excising shareholders "will be expected to have the right to subscribe for new capital on the same terms as the Government"

The question is will this do anything? In the UK there has been no easing of credit lines and that it is the point of this move as the statement says the "initiative will help to foster and encourage the flow of funds to the economy, and limit the impact of financial market difficulties on businesses and individuals"

I'm not so convinced.

The proof of the offering will be in the bank shares at close tomorrow. Especially Anglo Irish Bank who's shares closed at 38c on Friday.

The scheme will come into operation next month following discussions and negotiations. I wonder will we see mergers?

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Can you bank in Irish in Ireland?

With An Gaeilge set to become an offical working language on the 1st of January 2007, I cam across two posts on Ach go háirithe the orginal post on BANKING as gaeilge is very informative and gives information I never knew existed! Such as

BOI and TSB are currently reviewing their language policies, set for completion sometime in 2007.

BOI offer cheque books in Irish and some of their ATM have an Irish language facility.

TSB offer both their bank cards and their cheque books in Irish.

National Irish Bank offers us nothing but an apology!

Halifax / Bank Of Scotland have yet to get back to me.

I personally have used BOIs Irish language ATMs as they are on UCC's campus and I enjoy using them. I'm not a fluent speaker but I like being able to understand.

In BANKING as gaeilge (update)

Halifax/BOSI havent looked at langauge policy yet, instead focusing on expansion and EBS have no policy also at the moment and may carry out a review. Encouraging stuff eh? Still I thinks its a fanasating idea to email all the banks. An mhaith ar fhad Ach go háirithe!

Nollaig Shona agus Athbhliain faoi mhaise duit.