Madam, - Various commentators have been writing in your columns about the need to recapitalise the banks to enable them to face the horrendous task of writing down or even writing off a substantial portion of their loan books. Until we know the full picture inside the banks is it any wonder that their shares remain in the doldrums?
The Minister of Finance has acted very responsibly with his guarantee legislation, but now is the time for him to send in independent auditors to each of the banks to see what drastic further action is needed to get our economy moving again. - Yours, etc,
CHARLES SMYTH, Maperath, Kells, Co Meath.
Madam, — An incessant mantra warns against interference with the market - the implication being that (a) the natural forces under which it operates are benign and will result in optimum outcomes, and (b) it contains intrinsic mechanisms which generate its own stability.
Recent events show the above to be ineluctably wrong. First, the market is no different from any other human activity and is thus open to the effects of greed, fraud and manipulation. And second, it has become so diverse, with such arcane instruments as derivatives and mortgage securities, that without control the inherent complexity will have a tendency to become disordered. If all the negative forces in the market, which individually would result only in ripples, become convergent, then collapse is inevitable.
There are solutions. Constraints are necessary and banking must now discard complex practices and revert to a simpler model. — Yours, etc,
DON COLLINS, Maryborough, Timoleague, Co Cork.
Madam, - In view of the financial services meltdown, should I contact the Advertising Standards Authority with regard to the message at the end of financial services advertisements assuring us that the company in question is "regulated by the Financial Regulator". - Yours, etc,
MICHAEL F. O'NEILL, Faughart Terrace, St Mary's Road, Dundalk.