Get if off your chest. Who would you pin the blame on for the economic crisis in Ireland?
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To catch up on recent events concerning the banking collapse in Ireland, I decided to watch Questions and Answers, a current affairs program of RTE. Fintan O’Toole, a columnist and assistant editor of the Irish Times, stood out for his pragmatic criticism of government policy. Also participating, among others, was Martin Cullen, Minister for Arts, Sport and Tourism, representing the government.

In a sharp exchange, O’Toole accused the government of (more…)

Fianna Fáil has been main party of coalition goverments of Ireland since 1997 and has squandered an impressive economic boom that has now faded. While the national debt was reduced in the early years of the economic boom, this is now set to rocket. During the boom years, no significant improvements were made to the pitiful public health system (more…)

Critical conduits

We’ve come to learn, over the past few months, that banks are not typical businesses. They are basically huge conduits for distributing capital from savers and investors to other business that need to borrow in order to grow, for example, by financing the purchase of new equipment or facilities. As they are the trusted ones who manage the lifeblood of modern economies, they are critical to our economic welfare. (more…)

Irish banks such as Allied Irish Banks, Bank of Ireland and Irish Life & Permanent are receiving capital injections of public money from Ireland’s National Pension Reserve. All are suffering from the first major increases in bad debt provisions, now that they are admitting the extent of their speculative lending to Irish property developers and construction companies, of which, many are now breaking the covenants of their loans. (more…)

Anglo Irish Bank is primarily a lender to property developers and construction companies. They were nationalised following a staggering fall in their share price and lack of confidence in them by the financial markets. Now that their accounts are being scrutinised by auditors, (more…)

Financial regulators

Financial regulators appear to have been to be impotent onlookers in the monetary boom and bust of many developed countries, and not the strong authoritative pillars they were meant to be. Any financial regulator or central bank chairman who are proven to not have acted upon information received about excessive risk taking by the sector under their oversight,  or even if they did not adequately investigate and monitor the sector, should, in my opinion, be held legally responsible. (more…)

Bubbles bubbles everywhere…

Following the collapse of the Dot-com bubble in 2001, Alan Greenspan, chairman of the Federal Reserve at the time, dropped interest rates substantially to cushion the impact rather than let the market imbalances correct themselves. This monetary expansion resulted in excess liquidity in the markets that eventually found its way into oil and commodity speculation and, of course, property. (more…)