Thursday, Aug 26, 2010
And the answer is...
City AM: Why are the Irish banks still in such a mess?
The article is well worth a read and concludes thusly: "What is most startling in Honohan’s report is his refusal to blame the international financial crisis for Ireland’s problems. It would have happened anyway, the straight-talking central banker says, and the collapse of Lehman Brothers in autumn 2008 only exacerbated the Irish banks’ funding problems. The end of Honohon’s report sums up this chapter in Ireland’s history: “The Celtic Tiger period represented a solid convergence of Ireland to the frontier. But it ended in 2000, to be succeeded by an old-fashioned property bubble.” At least its central bank governor is under no delusion of what caused the crisis. It took a decade to grow, it may take a decade to unwind."
Posted by mark wadsworth @ 10:47 AM (882 views) Add Comment
8 Comments
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1. Wageslavex14 said...
It really is tragic what happened to Ireland.
I don't understand why all Central bankers don't recognise that all property bubbles end in tears. Every time.
2. Si said...
Wageslave,
Because the people involved make obscene amounts of money from it.
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4. mark said...
i wonder how much of this money vanished abroad, i have heard of people borrowing money against their houses, buying up property abroad for cash, now they are losing their UK houses or walking away and going abroad.
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6. Wageslavex14 said...
Si - I understand that, because so many people actually do make vast amounts of money from it, there is a well-funded lobby behind pushing money into property. However, my personal opinion is that the individuals involved in actually setting monetary policies, and the financial regulators, do not tend to financial spivs but rather fairly musty, disinterested academic economists who must know all about previous credit based housing booms, all of which went wrong.
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8. easybetman said...
But there is hope - recognising and admitting the problem is the first step to recovery. Until BoE admit their error.. it is still a downwards slippery slope.