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Amagerbanken - $2.8 Billion Bank Failure In Denmark

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The joke in the markets is that it was Irish banks that held all the bonds.

Don't worry it isn't a joke, Fine Gael are already planning to use it as a template for all the Irish banks to default on bond holders or those with large deposits (€100k+).

The cash has been coming out of the irish banks for weeks in anticipation of FG winning the forthcoming election and letting the banks go to the wall instead of saving them.

As far as I can see the only safe bank in Ireland will be Ulsterbank (RBS group).

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Don't worry it isn't a joke, Fine Gael are already planning to use it as a template for all the Irish banks to default on bond holders or those with large deposits (€100k+).

The cash has been coming out of the irish banks for weeks in anticipation of FG winning the forthcoming election and letting the banks go to the wall instead of saving them.

As far as I can see the only safe bank in Ireland will be Ulsterbank (RBS group).

So people with large sums of money and bondholders will now be wary of lending to banks? Will this cause more funding issues and higher interest rates?

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According to Bloomberg, senior bondholders and depositors over the insured limit will face losses of approximately 41%.

That should help focus the mind.

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Don't worry it isn't a joke, Fine Gael are already planning to use it as a template for all the Irish banks to default on bond holders or those with large deposits (€100k+).

The cash has been coming out of the irish banks for weeks in anticipation of FG winning the forthcoming election and letting the banks go to the wall instead of saving them.

As far as I can see the only safe bank in Ireland will be Ulsterbank (RBS group).

What I read is that FG are threatening, but not planning, to do that. Seems they're bargaining to alleviate the interest rates/repayment terms on the EU bailout fund.

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As far as I can see the only safe bank in Ireland will be Ulsterbank (RBS group).

Nah, remember the Bank of Ireland has the right to print Sterling banknotes. You can't go bust when you own the print works.

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That should help focus the mind.

Yup, that's how a bank should be wrapped up:

Denmark is dealing with Amagerbanken under regulations introduced in October designed to ensure taxpayers don’t have to meet the bill when lenders fail. The bank estimates its assets amount to about 59 percent of liabilities, meaning that creditors, including holders of senior unsecured bonds on which a government guarantee expired Sept. 30 and depositors with more than the insured maximum in their accounts, will face write-offs of about 41 percent.

“The bank hasn’t collapsed and gone into bankruptcy like the Icelandic banks, but has been selectively bailed out with a transfer of assets and a partial transfer of liabilities,” said Simon Adamson, an analyst at CreditSights Inc. in London. “Normally when this happens, senior debt and deposits are protected, such is the sensitivity around them, but this is bank resolution with debt and deposit haircuts, rather than a simple liquidation.”

That is deflationary though, of course. However, those savers on here hoping for a deflationary outcome should read the above and realise it is only to their benefit if their money is outside of the bank (ie. notes in a safe somewhere). Otherwise, they will lose money too, as the bank struggles to liquidate enough assets (loans etc) to cover their liabilities (deposits etc).

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If the Irish do let the banks go, the only creditor, the ecb, is going to take a big hit.

I thought the Irish central bank was busy printing and providing liquidity (read: buying rotten assets), too?

It would seem that giving depositors and bond holders a hair cut would be potentially better for the Euro. If it forces money out of Ireland and into other countries, then they are benefiting at Ireland's expense. Ofc, if it causes a general run on the Euro, it's not so good for everyone though. I suppose it depends what the response from the market is.

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Nah, remember the Bank of Ireland has the right to print Sterling banknotes. You can't go bust when you own the print works.

Yes they do in the north but the big problem is south of the border where they don't. They print their own in the North to get round the BoE cash holding & handling fees for BoE notes. They will all be printed by De la Rue any way (as are proper notes and even some euros)

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What I read is that FG are threatening, but not planning, to do that. Seems they're bargaining to alleviate the interest rates/repayment terms on the EU bailout fund.

To be taken seriously you have to collapse a small one or the most screwed one as an example first (i.e a shot across the bows for the majority). Otherwise known one will believe the threat, the Danes may have kindly done Ireland a favour by carring out the threat bit for them and all FG has to do is reference the Danish action.

Anglo has loads of vigilante bond holders and made some of the worst lending decisions so is a prime target for the most screwed to sacrifice award, BoI and AIB are seen as critical to the functioning of the banking system longterm so needs to escape. Candidate for small one is INBS or EBS as it just screws the lower levels of bond holders who should expect highest risk anyway (trouble is they probably expected no risk and high profits from a bank)

alphaville has caught on this morning:

http://ftalphaville.ft.com/blog/2011/02/09/483261/irish-bank-bond-haircuts-by-the-numbers/

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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