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Friday, December 5, 2008

Bank raid hits mortgage holders for millions

It has emerged this afternoon that 2 Irish financial institutions have decided not to pass on the .75% reduction in interest rate to their customers. It seems that the execs believe that they should hold on to the money, a move that will see the banks financial position improve and make them a more attractive proposition in the context of a merger!

So not only will tax payers provide a guarantee for their activity they are now effectively subsidising their balance sheet to make them attractive to vulture capitalist! My heart bleeds for Anglo Irish Bank who are only making €800M this year off the back of a share price of 50c. At the same time we have to guarantee their bad decisions while not getting to benefit from any of the good ones they made. The arrogance of the CEO when interviewed by Marian Finucane some months ago is breath taking.

So where is our Minister for Finance with his advice to the Banks that we must all live within our means and that in any deflationary episode in an economic cycle that we must reduce our expectations? No sign of reduced expectations here from Ulster Bank or Irish Nationwide. I presume Irish Nationwide is emailing the news with the same efficiency that saw them recently receive a heavy fine for touting on the back of the financial guarantee. Where is our financial regulator or Central Bank? Who exactly polices banks and protects the consumer because government certainly doesn’t ? In the case of Ulster Bank they benefit from being part of a larger UK based bank. The sooner Dick Spring is put on to a bank board to talk some sense into some of these sharks the better.

Once more the ordinary tax payer and consumer is easy meat, with FF not so much a case of he people living beyond their means rather FF not looking beyond their menu’s! Labour Youth has the right idea, nationalise them now, talk money later.

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