The EU Commission has said that it will look into whether the Irish bank plan breaches competition rules and if it does, the commission will force Ireland to recoup the money from banks. This may sound like more of Brussels poking its nose into our affairs. You know what it really is: a God send for the tax payer.
While I know the government had to do something to help the banks I am inclined to believe the went too far. Why had no other governments used this approach? Why was Ireland so roundly criticised? Doesn't a blanket prop really invite moral hazard since there isn't even a fear of failing now. At least on a case by case basis bank execs would wonder if they were going to get the help the need.
But I don't know. Perhaps as more facts emerge we will be provided with justification for the nuclear option. Fair enough. But one thing really worries me. It is that the government will not be robust enough with the banks in the even of their drawing down tax money. In our little clientelist, boys network elite, can we have confidence that the government will go in hard and rough if they have to bail out a bank?
In France, before Dexia was bailed out the government set strict conditions. They insisted not only that the CEO would go, but he would go without his golden parachute. Can you imagine that happening here? I can't.
The minister has talked about possibly taking equity and maybe putting members on the board or management team in the event of a major bailout. I haven't heard what is provided for in the legislation but I gather it is up to the minister in each case. Will he make use of the full rigour of these provisions or will he pussy foot and give funding with no guarantee other than the financial regulator will monitor the bank's activity.
Well you know what. The Financial Regulator is worse than useless. Yes, worse. If there were no regulator at least there would be no pretence of oversight. But the current regulator has been gutless, even reckless, in his dereliction of duty.
On prime time, CEO of the Regulator, a very uninspiring John Neary, insisted that the only problem in the Irish banks was the international credit freeze. He denied they had lent recklessly or taken too much risk with a construction bubble. You know what John - you are either stupid or lying. Perhaps a bit of both. And it is shocking John if the likes of you are left guarding 400 billion of tax payers money. What kind of crony are you? Where did you crawl from you spineless, disgraceful twit?
So please please, Mr Lenihan, I hope you show that under your sweaty shirt there is that which our regulator so singularly lacks: a backbone. Please, it's our money, so you have our full permission to be tough with the banks. Use it.