Madam, – I note in your report (Front page, December 23rd) that Minister for Finance Brian Lenihan will pump €3.4 billion into AIB, effectively nationalising the bank, from the funds of the National Pension Reserve Fund (NPRF).
However, on the NPRF website, it states that “No money can be drawn down before 2025” and that its statutory investment policy requires “the Fund be invested so as to secure the optimal total financial return provided the level of risk is acceptable to the Commission”.
First, how does the Minister have powers to override the fund’s statutory policy and second, after receiving a total bailout from the IMF/EU of €85 billion, the Minister could hardly describe using the fund as securing “optimal financial return”.
Please Minister: leave office and stop contributing to the ruination of our country. – Yours, etc,
Madam, – Let me see if I can get this straight. Minister for Finance, Brian Lenihan, having already “injected” €3.5 billion into Allied Irish Banks, now intends to “inject” a further €3.7 billion into it. From the State pension fund, of course! And furthermore, the “EU Commission” (which no one ever voted for) has approved a further “injection” into AIB of €6.1 billion by the end of February.
This is an amount very similar to that, which the taxpayers must pony up to the EU within the coming fiscal year under the “agreement”, whereby the EU/IMF is supposed to “bail out” the entire Irish State, and with similar amounts supposed to come for the next four years.
And all of this to keep a bank afloat, which is worth no more than €4.32 million (and going south very rapidly) on the open market. Not even Alice ever encountered Hatters as mad as these. – Yours, etc,
Madam, – So now the “unthinkable” has happened. The Irish Government has brought AIB “under state control” (Simon Carswell, December 23rd) and effectively nationalised that bank.
In 2006 (before the crisis blew up) I proposed that AIB and BOI be merged into the National Reserve Bank of Ireland with regional bank boards – similar to how the Federal Reserve Bank operates in the US.
At that time, the then Minister for Finance rejected this proposal on the basis of how much Irish banks were contributing to the exchequer by way of taxes, employment, etc.
When the dust settles on government/EU rescue packages for Irish financial institutions, the entire banking system has to be restructured and regional boards set up, with community banking given greater priority. As the people are paying for the banking system, it has to be more responsive to local needs – to the PAYE customer as well as SMEs. Small private banks should cater for the more affluent where the partners/directors are personally liable for the debts of the bank like those in Geneva.
There is something to give thanks for at the end of a torrid 2010 and it is this. Ireland is a small country which allowed its financial institutions to grow to meglomaniac levls of debt and this abuse of power can never happen again. – Yours, etc,