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Irish Are Banks Lending To Each Other And Using Said Loans As Collateral For Ecb Loans!

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http://www.irishtimes.com/newspaper/finance/2011/0217/1224290024749.html

IRISH BANKS are issuing bonds to themselves under the Government guarantee to borrow cheaply from the European Central Bank and to avoid drawing more heavily on emergency lending from the Irish Central Bank.

Four banks issued bonds worth €17 billion to themselves last month under the Government’s extended guarantee, the Eligible Liabilities Guarantee, to use as collateral to borrow from the ECB.

“What you have here is micro-quantitative easing, or money printing,” said Cathal O’Leary, head of fixed-income sales at NCB Stockbrokers. “The banks are issuing unsecured loans to themselves.”

All the bonds mature in April and May when the details of the banks’ plans to sell off assets and shrink the size of their businesses must be agreed under the EU-IMF bailout deal.

Bank of Ireland issued the largest amount, €9 billion, on four bonds on January 26th. AIB issued €2.63 billion on January 25th, Irish Life and Permanent €3.1 billion the following day and EBS building society €1.7 billion on January 28th.

Bank of Ireland raised a further €980 million on another bond on February 10th.

The bank said that the issuing of the bonds represented “a technical adjustment” replacing sterling bonds backed by UK mortgages as the ECB stopped accepting sterling loans as collateral from the start of the year.

AIB said that “own-used” bank bonds could be used as collateral from the ECB if Government guaranteed. The banks have leaned more heavily on central bank funding from Frankfurt and Dublin due to the loss of deposits and the closure of the markets to Irish-issued debt.

Genius, isn't fiat wonderful?

Just WTF happens when all of this lunacy blows up as surely it must? Total insanity. Ireland are clearly heading towards total financial collapse or just hoping the German taxpayer is willing to pick up the tab.

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http://www.zerohedge.com/article/paddy-meet-ponzi-irish-banks-lend-billions-each-other-use-ecb-collateral

When about six months ago we noted that the European ponzi is in full force, courtesy of banks using any toxic assets as collateral to the ECB, little did we know just to what heights this scheme would reach. Today we get our answer. The Irish Times writes that Irish Banks are issuing billions in bonds to themselves "under the Government guarantee to borrow cheaply from the European Central Bank and to avoid drawing more heavily on emergency lending from the Irish Central Bank. Four banks issued bonds worth €17 billion to themselves last month under the Government’s extended guarantee, the Eligible Liabilities Guarantee, to use as collateral to borrow from the ECB. “What you have here is micro-quantitative easing, or money printing,” said Cathal O’Leary, head of fixed-income sales at NCB Stockbrokers. “The banks are issuing unsecured loans to themselves.” And since this is happening in Ireland, it is most certainly happening everywhere in Europe. And yes - this is the pinnacle of a pyramid scheme - this is about a thousand times worse than what US banks did when they purchased CDO tranches from each other, as the risk in the Irish case is ultimately borne by the European taxpayer. But such is life when the entire financial system continues to be massively insolvent, and only openly Ponzi schemes of this nature allow the system to continue operating on a day to day basis.

Yet is this really surprising? After all, with the Fed as ultimate backstop to Europe, as has been the case ever since the advent of the FX swaps, which are still being used to this day, and with Illinois relying on Europe of all place to funds its pension funds, and with everyone relying on everyone else for a continued "funding" circle jerk, it is now clear that the entire global financial system is and has been for two years one massive ponzi scheme. Luckily, this time it is different, and whereas Madoff ended up in jail, Bernanke will soon receive the Congressional Medal of Freedom from the master puppet of it all.

Zerohedge's take on it.

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http://www.irishtimes.com/newspaper/finance/2011/0217/1224290024749.html

Genius, isn't fiat wonderful?

Just WTF happens when all of this lunacy blows up as surely it must? Total insanity. Ireland are clearly heading towards total financial collapse or just hoping the German taxpayer is willing to pick up the tab.

How can there be any financial collapse now there is widespread fraud and false accounting by bank owned governments?

Do you think if there was another potential Lehman's tomorrow they would let it go down?

There was a choice then but now the financial sector can make up their own rules because they have the power.

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http://www.irishtimes.com/newspaper/finance/2011/0217/1224290024749.html

Genius, isn't fiat wonderful?

Just WTF happens when all of this lunacy blows up as surely it must? Total insanity. Ireland are clearly heading towards total financial collapse or just hoping the German taxpayer is willing to pick up the tab.

But what can go wrong? They must be smarter than the rest of us, after all, these are professionals that earn millions in bonuses!

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How can there be any financial collapse now there is widespread fraud and false accounting by bank owned governments?

It's a good question- are we in fact stumbling toward state issued currency, as the spaniard so often advocates on this very board?

The following words of wisdom from the great Laural and Hardy seems to capture the essence;

Hardy: I gave the money to Stanley to pay [the landlord] for me.

Mrs. Hardy (to Laurel): So what did you do with it?

Laurel: I gave it back to him.

Hardy: You gave it to me?

Laurel: Yeah. Then you gave it to [Mrs. Hardy].

Mrs. Hardy: Do you mean to say that the money he gave to you that you gave to him that he gave to me was the same money that I gave to him to pay him?

Laurel: Well, if that was the money you gave to him to give to me to pay to him, it must have been the money that I gave to him to give to you.

:D:D:D

Edited by wonderpup

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i just bought some gold. :rolleyes:

Ive just issued myself a loan and am charging the interest to tax.

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the entire global financial system is and has been for two years one massive ponzi scheme.

But doesn't a ponzi scheme rely on a continuous flow of new entrants. Wealthy visitors from outer space?

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The newly issued bonds are the continuous flow of new entrants.

Apparently, these loans are paper exercises, as UK MBS in sterling are no longer accepted by the ECB as collateral. the loans are short term and are backed by the Irish Taxpayer..

this will allow the banks continue until the decision time on how they are going to proceed after the end of March...this has to be agreed with the ECB.

I suspect that there is a hidden bank run on all these banks....it IS the sensible thing to do after all.

The Bust will out.

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i just bought some gold. :rolleyes:

Nice one! When I first bought gold the price went up £150 pounds, it then dropped to below the price I paid, but don't worry about the day to day trades the long term trend is your friend.

Edited by Scott Sando

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The newly issued bonds are the continuous flow of new entrants.

Exactly but it can't carry on forever. It's a holding excercise at best.

Mind you Ireland's gone from Celtic Tiger star to dwarf star in the space of a few months. I guess it could even develop into some sort of financial black hole if europe and the rest of the world are a daft enough to allow it.

7 days until Ireland's general election. That should be interesting.

Edited by billybong

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But what can go wrong? They must be smarter than the rest of us, after all, these are professionals that earn millions in bonuses!

Whoever thought of this trick is certainly earning his keep! No one will lend Irish Bank money - the market knows that the government guarantee on bank debt will be dropped in time and the debts restructured. The only way to fund the enormous balance sheets is through central bank borrowing.

The central banks always require security (even if worthless!) and so agree to this farce.

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  • 285 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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