Book contents
- Frontmatter
- Dedication
- Contents
- List of figures
- List of tables
- List of boxes
- Preface
- Acknowledgements
- List of abbreviations
- Introduction
- Part I A chronological presentation of crisis events January 2007 – December 2014
- Part II Bail-out and/or bail-in of banks in Europe: a country-by-country event study on those European countries which did not receive outside support
- Part III Bail-out and/or bail-in of banks in Europe: a country-by-country event study on those European countries which received IMF/EU support
- 7 Iceland: Landsbanki, Glitnir and Kaupthing
- 8 Ireland: Anglo Irish Bank, Bank of Ireland, Allied Irish Banks
- 9 Greece: Emporiki, Eurobank, Agricultural Bank
- 10 Portugal: Caixa Geral, Banco Espirito Santo, Millennium Bank
- 11 Spain: Bankia and the other ex-cajas
- 12 Cyprus: Bank of Cyprus, Popular Bank (Laiki)
- Part IV The TARP program and the bailing out (and bailing in) of US banks
- Part V Summary of the micro studies
- Part VI Political and regulatory responses to the crisis: to bail out or to bail in, that's the question
- Conclusion: toward host-country supervision and resolution?
- Addendum
- Bibliography
- Index
8 - Ireland: Anglo Irish Bank, Bank of Ireland, Allied Irish Banks
from Part III - Bail-out and/or bail-in of banks in Europe: a country-by-country event study on those European countries which received IMF/EU support
Published online by Cambridge University Press: 05 February 2016
- Frontmatter
- Dedication
- Contents
- List of figures
- List of tables
- List of boxes
- Preface
- Acknowledgements
- List of abbreviations
- Introduction
- Part I A chronological presentation of crisis events January 2007 – December 2014
- Part II Bail-out and/or bail-in of banks in Europe: a country-by-country event study on those European countries which did not receive outside support
- Part III Bail-out and/or bail-in of banks in Europe: a country-by-country event study on those European countries which received IMF/EU support
- 7 Iceland: Landsbanki, Glitnir and Kaupthing
- 8 Ireland: Anglo Irish Bank, Bank of Ireland, Allied Irish Banks
- 9 Greece: Emporiki, Eurobank, Agricultural Bank
- 10 Portugal: Caixa Geral, Banco Espirito Santo, Millennium Bank
- 11 Spain: Bankia and the other ex-cajas
- 12 Cyprus: Bank of Cyprus, Popular Bank (Laiki)
- Part IV The TARP program and the bailing out (and bailing in) of US banks
- Part V Summary of the micro studies
- Part VI Political and regulatory responses to the crisis: to bail out or to bail in, that's the question
- Conclusion: toward host-country supervision and resolution?
- Addendum
- Bibliography
- Index
Summary
The Irish story
“This was not a problem confined to any individual bank. The problem was one for the system and caused entirely by the international market turmoil.” The sentence is taken from an e-mail, written on 30 September 2008 by the chief executive of the Irish FSA (the Financial Regulator, FR), Patrick Neary, to the Dublin correspondent of the Financial Times. And on the surface, one could believe his words. This was indeed the day after the TARP program had been rejected by the US House of Representatives, Wachovia Bank had agreed to be taken over by Citigroup, Bradford & Bingley had been nationalized in the United Kingdom, Glitnir had been almost totally nationalized by the Icelandic authorities, and Hypo Real Estate in Germany and Dexia in Belgium had been given extensive support by their respective governments. And it was also the day when the Irish government promised to guarantee not only the deposits but almost all liabilities of the Irish banks.
Yet both statements are wrong. The problems in the Irish banks were mostly of their own doing, even if triggered by the international liquidity crisis, and there were major differences between the biggest banks. What is even worse is that the bank with the worst problems, Anglo Irish Bank, was working hand in glove with its supervisory authorities, the Central Bank of Ireland and the Financial Regulator, to present to the public the likes of the above-quoted statement. One could even say that Anglo Irish orchestrated the government's public statements, covering up its own precarious situation.
Neary added in a TV interview two days later that “by any estimate, the Irish banks are so well capitalized compared to any banks anywhere across Europe that I am confident that they can absorb any [bad] loans or any impairments that emerge in the ordinary course of business over the foreseeble future.” This was a third statement by the FR that would shortly be proven to be way off the mark.
Of all the country failures studied in this book, none – with the exception of the United States – has been so extensively discussed in the literature and subject to a number of official investigations, as footnote 1 to this chapter bears witness.
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- The Future of Financial RegulationWho Should Pay for the Failure of American and European Banks?, pp. 237 - 258Publisher: Cambridge University PressPrint publication year: 2016
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