Madam, – We have been told that Nama is the only game in town. I note from Suzanne Lynch’s article (Business Today, October 8th) that Nobel Prize-winning economist Joseph Stiglitz was in town this week to receive the Trinity College Historical Society’s gold medal for outstanding contribution to public discourse. In relation to Nama he disclosed:“I am very uncomfortable with a government with such a minority support making such a decision . . . There is an alternative. Play by the rules of capitalism — if you can’t pay back your debt, shareholders and bondholders lose. If the government puts in money, it needs to get control commensurate with the money put in.”
Given that Trinity College is now rated 43rd best university in the world (The Times Higher Education/QS World University Rankings, Home News, October 8th), I have no doubt that some of the students listening to Prof Stiglitz are members of the Green Party and will be in town on Saturday afternoon! – Yours, etc,
Madam, – Why are the options for resolving Ireland’s bank crisis being limited to a Nama solution to the exclusion of all else? When companies are bankrupt they go into administration and the receiver sells off the assets, pays off the creditors and the shareholders receive what is left, if anything.
Rather than spending a fortune trying to keep the banks in business, should not the Government direct its energies to encouraging successful banks around the world to invest in a chain of Irish branches? This way the banks would stay open for business, deposits would be guaranteed and within 12 months the bank branches would be in the hands of HSBC and other successful banking organisations. Senior management would be fired, defaulting property developers and their companies wound up, and the country’s banking operations put into the hands of competent management. Not only would there be no cost to the taxpayer, but at a critical moment Ireland would benefit from a substantial inward investment. Furthermore, instead of the banks and politicians being in each other’s pockets, we could expected them in future to be at arm’s length. The employees would be part of thriving organisations with global prospects.
The Irish banks have not disclosed all their bad debts and in all probability will need more financial support and Nama may take years to succeed. Efforts to keep things afloat will be a dreadful drain on Ireland’s resources in the midst of a recession, with emigration rising, a declining tax base and tax revenues already having passed the point of diminishing returns. Surely there are other options worthy of consideration? In the meantime, US lawyers might demonstrate to us how we can take a class action against the financial regulators, members of Government and bankers past and present who have failed to fulfil their responsibilities to society, thereby causing investors, institutions and pension funds to suffer unprecedented losses. – Yours, etc,