Madam, - Brian Lucey (Opinion, September 2nd) is right in arguing that Anglo Irish Bank should not be confused with the State: the Government is either being disingenuous or excessively cautious in promoting the conflation of Anglo with Ireland because it would not appear to be a view shared by foreign investors. Indeed, it is precisely the Government's open-ended commitment to Anglo that is making investors uneasy about Ireland's prospects. The idea that the taxpayer - in the face of 14 per cent unemployment - should be bailing out Anglo is obscene, but the prospect of Ireland sinking rapidly because the taxpayer is prepared to make this foolish commitment defies credibility. - Yours, etc,
VANI K BOROOAH, MRIA,
Professor of Applied
Economics,
University of Ulster, Co Antrim.
Madam, - The implication from Dan O'Brien piece (Opinion, September 1st) is to perpetuate a myth that the normal rules of morality and honest behaviour are somehow not applicable when it comes to banks and other financial institutions. He states: "Letting Anglo go is unquestionably the 'right' thing to do. But a collapse would cause collateral damage. Faith in the other banks would be undermined, perhaps gravely. The contagion effect is powerful in financial affairs." This statement is unprovable and unworthy of a respected economist. It is exactly the type of scaremongering that the bank chiefs used in order to railroad through the blanket guarantee in September 2008. The "implicit guarantees" which he mentions allowed the banks, especially Anglo, to speculate wildly in the belief that the Government would be too scared to allow them to collapse - the so-called "moral hazard" nightmare scenario.
The result of the blanket guarantee we can now see - our credit ratings are heading through the floor, causing our borrowing cost to balloon, and a sovereign debt default looks ever more likely. Ultimately it may be our only way out of the mess.
I would also take issue with Mr O'Brien's assertion that Greece was also kept afloat because of fear of contagion "European governments collectively have not risked letting Greece go . . ." For one thing there are only two EU countries which can afford to back Greece - France and Germany, and it was quite clear from the start that their concerns were with their own banks which had huge exposure to Greek debt, so indirectly they were just bailing these out.
Like in all other areas of human affairs there is never a wrong time to do the right thing. Anglo must go. It never was a bank in any conventional sense - no branch network and no ordinary depositors, and should never have been included in any guarantee. Also, there was never any need to include in the guarantee the bondholders of any banks, senior or subordinate, since bond investors are financial experts well aware of the risks, and not dependent on the regulator. - Yours, etc,
AIDAN McGRATH,
Chestnut Court,
Athlone, Co Westmeath.
A chara, - I note that the Green Party wants a quicker wind-down of Anglo Irish Bank (Front page, August 30th). Would it not be most helpful to us taxpayers if the party defined more clearly what it means by "quicker wind-down" and did a comparative analysis in terms of time, cost, risks and consequences for the Irish people over the short-, medium- and long-term? Then we might be able to better evaluate its proposal which currently appears to be presented in a "lazy and woolly" way. - Yours, etc,
MICHAEL WHITE,
Kilbane,
Castletroy, Limerick.