Posted on 11/22/2010 11:00:01 PM PST by bruinbirdman
British banks lost billions of pounds in value yesterday after the Irish bail-out was thrown into jeopardy over concerns that the country's government might collapse before a rescue deal can be agreed.
The share prices of Royal Bank of Scotland and Lloyds fell sharply as stock markets took fright at the political chaos engulfing Dublin.
It had been hoped that the £70 billion bail-out agreed between Ireland, the European Union and International Monetary Fund would ease investors' fears over the eurozone economies.
But within hours of the Irish government admitting it needed help, the Green party – on whom Prime Minister Brian Cowen relies for support – called for a general election by the end of January.The suggestion prompted a fall in the value of the London stock exchange and the euro and a rise in the cost of borrowing for both the Irish and Spanish governments. The head of the eurozone warned that "crazy" market speculators could turn on Portugal and Spain next.
British banks have more than £140 billion in outstanding loans to Ireland. RBS has forecast it will have about £10 billion in "impaired" Irish loans next year. Lloyds is expected to write off more than £1.6 billion.
If the bail-out fails, further outstanding loans could be in doubt. Yesterday, shares in RBS fell by almost five per cent and Lloyds fell by more than four per cent.
Last night, Mr Cowen insisted he would negotiate the rescue deal before dissolving the Irish parliament and calling an election in January.
In an emergency statement to Parliament, George Osborne announced that the British Government would play a leading role in the international bail-out with a direct loan worth several billion pounds to Ireland. The loan will add to this country's record government debts.
British taxpayers will also
(Excerpt) Read more at telegraph.co.uk ...
It is hard to believe that Irish bankers could create that much bad paper...
They lent to Italy and Greece.
This nothing more than another central bankers scam!
An up front commission with every loan every step of the way.
What's that, real estate agent and company, bank, secondary market, securitization, security sales, security/loan insurance. On a $250,000+ house X millions of them.
That is just the finance/real estate industry.
Countries all deficit spend. Every year they must sell trillions of debt. What happens when the bond market dries up, not just banks, countries?
Forced austerity? Only for countries that can't print money. Heck, the USA already needs to buy bonds from itself/The Fed.
In Ireland, they will have forced decreases in their SS/medicare equivalent. Forced reductions in their dole/welfare, etc.
The big picture goes way beyond fraudulent bankers going to jail or bankrupt banks.
yitbos
“British banks have more than £140 billion in outstanding loans to Ireland.”
This has been and will continue to be, about bailing out banks that encouraged housing bubbles all over the world.
In this case, it is the BRITISH banks that need the bailout, and the Irish people who will be forced to pay to repair those banks insolvent balance sheets. Like this country is bailing out Goldman and JPM, and the rest of the country can go to, well, you know, hell.
The whole world will before this is over.
Next year we get to see who is swimming naked in State and local bonds and loans in the US.
Sounds like Sen. Dodd maybe has lost money on his Irish house.
Yup. And for that reason, we should hope that this attempt to prop up the Irish banks fails. The only way we get to the end of this is that bankers start taking losses - big losses - and central bankers start learning some humility.
Tick, tick, tick....
The Irish Green Party, a big part of Irish socialist deficit spending, has withdrawn support for the governing coalition (which nationalized the biggest and worst banks) and is forcing elections in January.
yitbos
Wow! So much for Irish independence and freedom. Barely 100 years and... poof! Owned by the Germans!
I saw that. I don’t know if their political gambit will be enough to finally stop this charade of propping up stupidity at the banks.
Sooner or later, the Germans have to say “nicht mehr” and leave the French and Brits on the hook for their own cupidity.
Ja, oder kein mehr!
perhaps Ireland
can be profitably
converted into an amusement park.
Well, we are going to see Brussels/Deutschland run Ireland's budget. In any case, during the upcoming depression, Ireland won't have the revenues and won't be able to print/borrow money to cover their deficit.
I hear Grease is selling islands to hit wealth distribution targets.
yitbos
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