Euro-zone bank exposure

[Dubh the dark]

Just came across this astonishing graph outlining the bank exposure of Spain, Portugal, Ireland and Greece calculated in the billions of $.

http://graphics.thomsonreuters.com/1...XP0411_SB.html

According to this graph Irish bank exposure is $516billions;

To Germany;

3.4 Billion PS Debt
57.8 Billion Corporate Bank Debt
92.8 Billion Personal Debt.

To UK;

6.6 Billion PS Debt
37.4 Billion Corporate Bank Debt
116.1 Billion Personal Debt.

These are absolutely astonishing figures for just one of the PIGS. Is it possible to guarantee all bank exposure of a country like Ireland with a 4.5million population?! If not what does this mean for the Euro-zone?

[magpie]

Just came across this astonishing graph outlining the bank exposure of Spain, Portugal, Ireland and Greece calculated in the billions of $.

http://graphics.thomsonreuters.com/1...XP0411_SB.html

According to this graph Irish bank exposure is $516billions;

To Germany;

3.4 Billion PS Debt
57.8 Billion Corporate Bank Debt
92.8 Billion Personal Debt.

To UK;

6.6 Billion PS Debt
37.4 Billion Corporate Bank Debt
116.1 Billion Personal Debt.

These are absolutely astonishing figures for just one of the PIGS. Is it possible to guarantee all bank exposure of a country like Ireland with a 4.5million population?! If not what does this mean for the Euro-zone?

The real story is starting to drift out. It gets worse each time. I see the ex finance minister of Ireland is claiming he was bounced into the bail out by the EU. With those sort of cash figures he could have got the bailout for free He had it in his hands to bring down the whole shebang if they did not play ball. Seems he lacked the balls for power play when it came to the crunch.

[Dubh the dark]

The real story is starting to drift out. It gets worse each time. I see the ex finance minister of Ireland is claiming he was bounced into the bail out by the EU. With those sort of cash figures he could have got the bailout for free He had it in his hands to bring down the whole shebang if they did not play ball. Seems he lacked the balls for power play when it came to the crunch.

That's the main view here alright.

There are a lot of figures and reports being released right now that were kept under wraps by the last government, that are seriously making default look like the only option. The ECB for its part is still in crisis mode 2 years on constantly drafting plans but refusing to take any serious action.

[k995]

The real story is starting to drift out.

This was known and said with each bailout.


Eu was involved in american banks, why wouldnt they be involved in european?

[Menelik_I]

Here is a graph much more graphic.

Just came across this astonishing graph outlining the bank exposure of Spain, Portugal, Ireland and Greece calculated in the billions of $.

http://graphics.thomsonreuters.com/1...XP0411_SB.html

According to this graph Irish bank exposure is $516billions;

To Germany;

3.4 Billion PS Debt
57.8 Billion Corporate Bank Debt
92.8 Billion Personal Debt.

To UK;

6.6 Billion PS Debt
37.4 Billion Corporate Bank Debt
116.1 Billion Personal Debt.

These are absolutely astonishing figures for just one of the PIGS. Is it possible to guarantee all bank exposure of a country like Ireland with a 4.5million population?! If not what does this mean for the Euro-zone?

[Christaras]

We Greeks are soooo screwed.

[Dubh the dark]

That one puts Ireland at $746.8billions, my head is about to explode..

Edit; What are the other exposures that add $228.9billions to the total cost of Irish bank exposure?

[magpie]

Never mind Dubh the ECB/IMF want domestic wages reduced for the lower paid, They think it will stimulate the economy and make Ireland more competitive, Places like cafe,s and supermarkets plus corner shops ect will be able to charge less.
May take awhile to pay off 700+billion . Irelands low paid jobs are not causing business losses, Its the huge markup by the middlemen which has overpriced goods and services, Together with a high percentage of the low paids wages going in taxation, direct and indirect.Leading to a collapse of the domestic economy

[Dubh the dark]

Never mind Dubh the ECB/IMF want domestic wages reduced for the lower paid, They think it will stimulate the economy and make Ireland more competitive, Places like cafe,s and supermarkets plus corner shops ect will be able to charge less.
May take awhile to pay off 700+billion . Irelands low paid jobs are not causing business losses, Its the huge markup by the middlemen which has overpriced goods and services, Together with a high percentage of the low paids wages going in taxation, direct and indirect.Leading to a collapse of the domestic economy

Retail and services has taken a massive hit. Add the loss of jobs with increased emigration, wider tax-brackets, increases in food, petrol, interest rate/mortgages, health/home insurance, Universal Social Charges, proposed water/property charges to the loss of earnings through pay-cuts/cuts in working hours and the repayment of such an enormous debt in a shrinking economy seems impossible. The killer is that there really is no plan, just a rudderless drift towards default, which is lunacy;

47,000 jobs have been lost in the retail sector since 2008.
That is according to Retail Excellence Ireland who say they expect more stores to close this year
Retail sales fell again last month for the 37th month in a row.
Year-on-year sales fell by an average of 3% in the first 3 months of the year.

http://www.newstalk.ie/2011/news/6re...utive-month95/

[Thorn777]

At least most of that is backed by terribly bloated assets.

[Thorn777]

How about slashing up TBTF banks, and then giving these banks and pension-funds a haircut?

This is all about TBTF. Govts are afraid banks/pension-funds loose out to much on all these toxic/bloated assets invested in Ireland & Co, so they might fall down again, but in the meantime this fear is crippling entire national economies. All while that economic stand-still doesn't make the situation for the banks and their junk assets any better.

Touch something and bring back some freakin liability in this game of capitalism.

[Dubh the dark]

Finnish media reported Mr Rehn as having said that extending loan guarantees to debt-ridden European nations is the best way to avoid a meltdown of euro zone financial stability.

Speaking at an event organised by Finnish pro-EU organisation Euroklubi, Mr Rehn said that the guarantees were the best way to avoid a financial meltdown like the crisis sparked by the collapse of Lehman Brothers in the United States.

http://www.rte.ie/news/2011/0426/rehn-business.html

It's unfortunate but it's still business as usual, surely financial guarantees are worthless when you lack to wealth to back them.

[magpie]

I am afraid Dubh that the ship will be kept afloat until the Bond holders have been paid off and then cast adrift. All this shouting from various quarters about having to bail out feckless countries with EU money is getting a bit worn.
The ECB are not bailing out these countries, They are subsidising European bank and trustfund groups risky loans while piling more debt on the countries in trouble. The money from the ECB goes to the banks in Ireland, Greece and now Portugal, and from there straight back to the exposed lenders accounts. Once a balance has been achieved and the lenders are no longer at risk from a meltdown. Then the debt ridden countries can sink or swim.
Regarding a plan in Ireland. I think it will be a case of every man/woman for themselves. No country of 4 million without oil or mineral assets can hope to put a creditable plan in action while under the fairy tale illusion that 700+ billion can be paid off.

[Thorn777]

Well those 700 billion isn't "just debt you need to repay", most of that "exposure" is just money invested in the formerly booming Irish real-estate market. That market will never get in the pre-crisis shape. Its all to buy time for these banks and get out as smoothly as they can in Ireland, Greece and everywhere else. Though I don't see it becoming smooth. They need to take heavy losses anyhow. Just lowering some wages and firing employees wont jump-start a boom like Ireland had pre-crisis(hence the value of the assets).

Slash them before its to late.

[Dubh the dark]

Slash them before its to late.

Unfortunately we'd need governments with a backbone to support such measures.

[Thorn777]

Unfortunately we'd need governments with a backbone to support such measures.

Well Hypo-Vereinsbank and ING-DIBA(two giant German and Dutch banks) where slashed two years ago, since it was direly necessary of the spot at that time. Now they think the banks and the Eurozone countries in question still have chances. They are trying to beat two flies with one strike like we say in Germany, but I think when push comes to shove banks will be slashed. They are powerful but not that powerful or suicidal, at least those outside the Anglosaxon sphere are not. Sounds polemic, but I've seen and heard enough of and from the financial world. Not all bankers are complete maniacs, and in the two mentioned cases the CEO's and shareholders cooperated along without complaints.

Not sure the same can be said about the ideologue politicians in Brussels though, when it comes to abandoning Eurozone countries.

[magpie]

Well those 700 billion isn't "just debt you need to repay", most of that "exposure" is just money invested in the formerly booming Irish real-estate market. That market will never get in the pre-crisis shape. Its all to buy time for these banks and get out as smoothly as they can in Ireland, Greece and everywhere else. Though I don't see it becoming smooth. They need to take heavy losses anyhow. Just lowering some wages and firing employees wont jump-start a boom like Ireland had pre-crisis(hence the value of the assets).

Slash them before its to late.

I fully agree with you Thorn. The Irish government seem like rabbits caught in the car headlights.
4 more years of these suicidal policies and this country will be an economic wasteland for a massive amount of its population. Oh well after the great famines of the 19th century Irelands population halved in size, through starvation and a huge emigration flood to the US and England. Maybe the new Nivarna destinations, will be Germany and France Australia is feeling the first waves but the ripples will have to spread out.

[Dubh the dark]

Maybe the new Nivarna destinations, will be Germany and France Australia is feeling the first waves but the ripples will have to spread out.

Only problem is that we're very poor on speaking second languages, most of us haven't even mastered Irish with both Primary and Post-Primary classes

[magpie]

Only problem is that we're very poor on speaking second languages, most of us haven't even mastered Irish with both Primary and Post-Primary classes

I think being broke and hungry may prove a great incentive to pick up some smattering of German and French, enough to get you going and you will improve, living in these countries.
Regarding the poor performance with Irish it was never really seen as being essential to making a living in main stream Ireland and probably even less so now?

[Dubh the dark]

Arrgghh lads, it get worse, our GDP growth estimate's has been slashed in half, to add to our problems;

Growth in economy for 2011 cut by half in latest forecast

The new 2011 projections for gross domestic product (GDP) have been cut by more than half. In December, the Department of Finance believed GDP would increase by 1.8 per cent this year. Now it foresees an expansion of only 0.8 per cent

Separately, higher inflation in the euro zone in April made another interest rate increase more likely by the summer, while other figures released yesterday show the banking system weakening further in March.

The Government has become more pessimistic in its outlook for the economy’s performance over the next half decade. The current period was characterised by the Department of Finance as a “relatively jobless recovery”, with the domestic economy expected to remain in recession this year and next.

The export sector will continue to be the only source of growth, according to the new figures.

http://www.irishtimes.com/newspaper/...295766665.html