The Banks

Once regarded as pillars of the Irish economy, the banks today are considered as the prime suspects in destroying the economy. It has been a dramatic decline from pre 2008, when leading bank officials were being interviewed constantly by the media. Figures such as Sean Fitzpatrick, David Drumm, Michael Fingelton, and Dan McLaughlin were regarded as economic geniuses and their every word taken as gospel.

In September 2008 the Irish Government made the worst economic decision since the foundation of the state.  The decision to introduce a blanket guarantee left the people of Ireland on the hook for any losses the banks may occur. Rather than introduce a limited guarantee covering future loans, the government introduced a whole scale guarantee for which Ireland will fell the consequences for decades.

  

The star child of the Celtic Tiger Anglo Irish Bank is to be wound down and put out of its misery. This institution alone has cost the Irish taxpayer close to €30 billion. From the height of a share price close to €18 in May 2007 Anglo Irish is now worthless. Its uncompleted decaying building in the Dublin docklands is a symbol of its excessive greed and the consequences of where such greed can lead to.  

Share Price Chart

Irish Nationwide is also to be wound up having cost up to 7 billion to recapitalise. Their former chief executive Michael Fingelton still refuses to hand back his one million Euro bonus he received in 2009. It has also being revealed in the past year that Fingelton has a pension pot in excess of 20 million Euros. This must be extremely upsetting for the shareholders who lost a small fortune and possibly their own retirement security net, in part thanks to Fingeltons miss management of Irish Nationwide. 

Allied Irish Bank has so far cost the nation of Ireland up to €19 billion. Its attempt to follow Anglos strategy of betting on the property market ultimately ended in tears.  The bank is to scrap half its workforce due to the downturn and close a significant number of branches. 

Bank of Ireland wasn’t as aggressive in its pursuit of the property market as the other major Irish Banks, but it was still left exposed due to its reliance on the Irish property market. The Irish state has so far invested around 7 billion Euros and has a 36% stake in the company.

Between 2008 and 2010 when the banks were struggling to survive, they still managed to pay bonuses of €44.7 million. The Chief Executive Officer at Bank of Ireland admitted to the Dail in January this year that his company provided ‘erroneous information’ in relation to performance relation bonuses. In the past few months of 2008 Anglo Irish Bank employees received €20 million. 

It’s ironic that the banks so long the cheer leaders of the free market system are now almost all completely controlled by the state. The Irish people will be left with the bill for their excess; each of Ireland’s citizens will owe €15,000 thanks to the banks reckless pursuits of short term profits. 

During the Celtic Tiger the banking sector in Ireland became one of the most competitive in Europe. Ireland witnessed an influx of foreign banks entering the market. The past few years however has seen a number of these banks withdraw from Ireland. In the coming years the banking sector will be dominated by BOI and AIB and this will mean increased prices on a range of services. 

The bankers in Ireland are now being held in the same contempt as the landlords of the 19^th Century. While the people of Ireland are exposed to harsh austerity measures in part thanks to the banks, not one single banker has being sent to jail. This is a scenario which outrages everyone in Ireland.