The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[seafoid]

http://www.ft.com/cms/s/0/3e1d027e-6c47-11e2-b73a-00144feab49a.html

Netherlands nationalises SNS Reaal

By Matt Steinglass in London

The Netherlands has nationalised SNS Reaal, the fourth-largest systemically important bank in the Netherlands, at a cost to Dutch taxpayers of €3.7bn.
The bank had spent the past several weeks in a desperate search for private capital to compensate for heavy losses in its real estate holdings, particularly in Spanish assets.
•Jeroen Dijsselbloem, the Netherlands' finance minister, said in a statement he had "looked at every alternative involving private parties", but found none that could guarantee the stability of the Dutch banking system.
With ABN Amro still in government hands after it was nationalised in 2009, the nationalisation of SNS Reaal means two of the Netherlands' four systemically important banks are state-owned.
The nationalisation, carried out under the Netherlands' 2012 law on bank intervention, will mean shareholders of the bank and subordinated debt holders will see their stakes wiped out.
The state will inject €2.2bn in new capital, while forgiving €800m the bank still owed from its earlier bailout during the financial crisis. It will also write off €700m in the value of the bank's real estate assets.
"I can sympathise easily with the resistance many will feel because we again will need to use a large amount of public money," Mr Dijsselbloem said. "This is why I want the private sector to pay as large a share as possible of the rescue of SNS Reaal."


http://blogs.ft.com/economistsforum/2013/01/go-fitch-go/

The Dutch legislature last year passed the so-called Intervention Act. It hands the treasury and Dutch central bank the power to force unsecured bondholders to participate in any bank rescue operation, for example by means of converting the bonds into shares. And while the Dutch treasury secretary, Jeroen Dijsselbloem, has said very little about a possible bailout of SNS Reaal in public, he seems quite prepared to make unsecured bondholders pay before any tax revenues come into play.
As the wipeout of ordinary, unsecured bondholders of a major European bank becomes increasingly likely, Fitch, one of the three major rating agencies, has issued a stark warning. In an interview with the Dutch Financieele Dagblad on January 24, managing director and research analyst Bridget Gandy of Fitch said: "If an important country in Europe wipes out a troubled bank's ordinary bondholders, it would fundamentally change the way we view [European] banks."

[Canalman]

Am terribly confused. Have been reading alot  of columnists sniffing that it is the "Papist countries "( and Orthodox Greece ......... really another  word for Catholic) that have been feckless and naughty in the Eurozone.
Say it ain't so Joe!

Dutch taxpayers bailing out a bank. I refuse to believe it.

[Billys Boots]

Dutch taxpayers bailing out a bank. I refuse to believe it.

Does this mean that they were expecting EFTA to ride the Icelanders in their favour?

[seafoid]

Tweet from Karl Deeter at the Irish economy conference (#ieconf)

http://twitter.com/search?q=%23ieconf&src=hash

Michael Taft - austerity has failed, meanwhile in the background outside a man digs in the bin for food
http://twitpic.com/c01kru

[muppet]

Tweet from Karl Deeter at the Irish economy conference (#ieconf)

http://twitter.com/search?q=%23ieconf&src=hash

Michael Taft - austerity has failed, meanwhile in the background outside a man digs in the bin for food
http://twitpic.com/c01kru

Seafoid, did you watch those Zeitgeist movies and if so what did you make of them?

[seafoid]

Tweet from Karl Deeter at the Irish economy conference (#ieconf)

http://twitter.com/search?q=%23ieconf&src=hash

Michael Taft - austerity has failed, meanwhile in the background outside a man digs in the bin for food
http://twitpic.com/c01kru

Seafoid, did you watch those Zeitgeist movies and if so what did you make of them?

What films are they? 

[muppet]

Tweet from Karl Deeter at the Irish economy conference (#ieconf)

http://twitter.com/search?q=%23ieconf&src=hash

Michael Taft - austerity has failed, meanwhile in the background outside a man digs in the bin for food
http://twitpic.com/c01kru

Seafoid, did you watch those Zeitgeist movies and if so what did you make of them?

What films are they?

Critics call them conspiracy movies, and they are in that vein but they are quite good, especially on the subject of money. Plus the style is to present info and you make up your mind, rather than the usual down your throat stuff.

http://www.zeitgeistmovie.com

They are free to view online. The 1st was ok (a lot of the 911 stuff was not that convincing for me), the 2nd was better mainly on money as I say, and I haven't watched the 3rd yet.

[Main Street]

In the Economist,  tomorrow's print edition
http://www.economist.com/news/finance-and-economics/21571184-court-ruling-over-icelandic-bank-blow-global-banking-cooler

'A court ruling over an Icelandic bank is a blow to global banking'

Translated into citizen speak, that means, Citizens 6   Greedy Global Banking 0 

What has upset the Economist so much?
In the event of a bank failure, the EFTA court upheld the right of a country to place priority to the claims of the deposit holders and put the bank's creditors to the back of the queue.
The Economist twists this around as if Iceland had discriminated against foreign deposit account holders,
but  the Economist does not print the actual significant story, that Iceland discriminated against global banking creditors thereby ensuring all the deposit holders, both foreign and domestic, got all their money back from the assets of the failed bank, as priority claimants.

In the EU, you are not supposed to make such a discrimination. In the EU after a bank has gone belly up, assets gone,  you are supposed to transfer the rest of the liabilities,  both depositors and private corporations, onto taxpayers. Supposedly  a country can't mess around and decide to  discriminate with the priority of claimants. 
The Economist's parting line is
'This week's ruling will only weaken confidence in the willingness of countries to bail out foreign creditors'. 

FWIW, the assets of the failed bank were about £10bn   
Claimants. deposit accounts were about £10bn     but  global banking had claims of about £70bn, left muttering 'discrimination' ..'discrimination'...
Has Iceland collapsed into a state of financial infamy? apparently not.

[seafoid]

Tweet from Karl Deeter at the Irish economy conference (#ieconf)

http://twitter.com/search?q=%23ieconf&src=hash

Michael Taft - austerity has failed, meanwhile in the background outside a man digs in the bin for food
http://twitpic.com/c01kru

Seafoid, did you watch those Zeitgeist movies and if so what did you make of them?

What films are they?

Critics call them conspiracy movies, and they are in that vein but they are quite good, especially on the subject of money. Plus the style is to present info and you make up your mind, rather than the usual down your throat stuff.

http://www.zeitgeistmovie.com

They are free to view online. The 1st was ok (a lot of the 911 stuff was not that convincing for me), the 2nd was better mainly on money as I say, and I haven't watched the 3rd yet.

Thanks Muppet. I'll check them out.

[Declan]

http://www.ourcountry.ie/

Roll up roll up last chance to voice your opinion.

[muppet]

http://www.rte.ie/news/business/2013/0206/366525-anglo-promissory-note/

The Government plans to liquidate the Irish Bank Resolution Corporation, formerly Anglo Irish Bank, as part of changes to replace the promissory note with a new financing arrangement.

The Central Bank will take over the balance sheet of IBRC under the new deal.

Any new arrangements with regarding IBRC would need backing from the European Central Bank governing council. Its members are gathering in Frankfurt tonight ahead of ahead a formal meeting tomorrow morning. The meeting of the ECB governing council will be followed by the monthly press conference held by the bank's president Mario Draghi.

It is speculated that the promissory note would be replaced with a long term Irish Government bond.

This would have the effect of reducing the burden of annual repayments of €3.1 billion on the Exchequer.

I reckon this would make the annual cost less but the overall cost more. Also tearing up the Promo would piss people in Europe off, but would not constitute a default afaik. Switching to a Government Bond now would make it almost impossible to walk away from. Presumably we issue a bond to clear the Promo but we are stuck fast with the terms of the new bond.

This (still guessing) effectively means slightly less increased taxes now as we will borrow some taxes from further in the future. Of course the Promo was Lenihan borrowing taxes from the future (now) to bail out Anglo bondholders in 2008. This to me is just more can kicking.

[Declan]

Will wait to hear full details but on the face of it  we are re-mortgaging a debt that was never ours in the first place.
We shouldn't be paying this full stop. After shouldering and largely halting a massive europe wide banking failure we are getting a measly 5 year extension on debts accrued through reckless lending by european banks to a private irish bank.

Update: Dara Doyle - Bloomberg bureau chief in Dublin

@DaraDoy 1)*IRELAND SAID TO PLAN TRANSFER ANGLO IRISH LOANS TO NAma IRELAND SAID TO PLAN SPECIAL LIQUIDATOR TO FORMER ANGLO BAnk


Another three card trick I think

[muppet]

Looking like a 40 year bond, thus taxes collected up to the year 2053 to go to paying off Anglo. I must tell my kids they will have to apologise to their kids for me.

[brokencrossbar1]

Looking like a 40 year bond, thus taxes collected up to the year 2053 to go to paying off Anglo. I must tell my kids they will have to apologise to their kids for me.

Basically that is correct, 2 generations of Irish people basically being fucked over by greedy property speculators and developers.

[seafoid]

http://namawinelake.wordpress.com/2013/02/06/nama-to-merge-with-ibrc-as-scramble-for-promissory-note-solution-intensifies/#comments