Friday, May 29, 2009

Bank Nationalisation Sucks

The Irish government has announced that is will need to put €4 Billion into Anglo Irish Banks to recapitalise the bank. The bank has lost €4.1Bn for the six months to the end of March and total losses are likely to reach €7.5 bn. The government says it cannot allow the nations third largest bank to fail so they will need to invest the €4Bn to recapitalise. If the government would stop throwing money onto the bonfire of the vanities that is Anglo Irish Bank perhaps it wouldn't be the third biggest bank in Ireland and we could cut loose this dead weight.

Interestingly at the bottom of the story on RTE they say
The results show deposits from businesses in Anglo dropped by almost €9bn after nationalisation.

Now I don't know anything more about banking than the average Irish tax payer but if the bank has lost €9Bn in deposits after we nationalised it and now the Irish tax payer needs to give them €4Bn isn't that proof that if we hadn't nationalised the bank and had found a better way to reassure depositors the bank would have €5Bn more money on its books than it does now?

On a side note the government will be sinking €4 Billion into Anglo while on the other side of the same street as the Anglo HQ they are planning on building a €4 Billion metro tunnel. How often has a government thrown €8 Billion into two bottomless pits within 50 meters of each other?

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