Interestingly, Ireland has unlimited coverage for depositors in major Irish banks. That sounds like a great idea when its passed in a legislative body and various parties who need to look a bit more populist this year without losing their capitalist credentials are prone to support such things. But the piper eventually comes calling with a big invoice. In difficult times (like now) unlimited liability suddenly looks like a problem, and it is entirely possible to schedule appropriate reserves for. Oops. $250,000 looks tame by comparison.
The Wall Street Journal makes the rather excellent point that depositors in Irish banks that are covered effectively are securities holders in a class of sovereign debt. That’s great for the depositors (after a fashion) but difficult to reconcile with other costs.
Subsidizing Depositor’s Income [Wall Street Journal]
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Can someone explain to me how $250k fdic coverage and being attached to a tax bill (the only substantial changes) resolve the issues that had with it before, when it failed?
etrade should redomicile it’s bank in Massachusetts, unlimited deposit insurance already exists http://www.difxs.com...
Too bad no one noticed this…
Political cover? Do you want to be the congresscritter that voted against protecting small businesses and the middle class?
buffet puts $3Bn in GE
The key part of the Irish act is not unlimited gauranty of deposits, but the Irish gov backing interbanking loans. Thus allowing banks to lend to each other. The latter helps make the former a non-issue, by insuring that the banks do not fail due to lack of liquidity. The 3 major Irish banks are in very rude health, all things considered, and should not be at any risk, except some idiot at UBS decided to speculate that there were issues. The logic behind why there would be problems – Property is bad at moment, these banks make lots of property loans, therefore they must be bad, is so childish as to be insulting. Anglo only makes Commercial property loans, yet is hammered due to a residential crisis??
The Japanese did the same back in the day. All in the name of global harmony.
Although, their structure was far superior
http://www.dic.go.jp/english/e_katsudou/e_katsudou2-4.htm
Lambs get bailed out — they even get their trust fund…courtesy of Sen. Bauchus a Montana democrat.
http://baucus.senate.gov/newsroom/details.cfm?id=261894
SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUS8
PENSION ON WOOL PRODUCTS; WOOL RE9
SEARCH FUND; WOOL DUTY REFUNDS.
10 (a) EXTENSION OF TEMPORARY DUTY REDUC11
TIONS.—Each of the following headings of the Har12
monized Tariff Schedule of the United States is amended
13 by striking the date in the effective period column and
14 inserting ‘‘12/31/2014’’:
15 (1) Heading 9902.51.11 (relating to fabrics of
16 worsted wool).
17 (2) Heading 9902.51.13 (relating to yarn of
18 combed wool).
19 (3) Heading 9902.51.14 (relating to wool fiber,
20 waste, garnetted stock, combed wool, or wool top).
21 (4) Heading 9902.51.15 (relating to fabrics of
22 combed wool).
23 (5) Heading 9902.51.16 (relating to fabrics of
24 combed wool).
296
O:\AYO\AYO08C32.xml S.L.C.
1 (b) EXTENSION OF DUTY REFUNDS AND WOOL RE2
SEARCH TRUST FUND.—
3 (1) IN GENERAL.—Section 4002(c) of the Wool
4 Suit and Textile Trade Extension Act of 2004 (Pub5
lic Law 108–429; 118 Stat. 2603) is amended—
6 (A) in paragraph (3)(C), by striking
7 ‘‘2010’’ and inserting ‘‘2015’’; and
8 (B) in paragraph (6)(A), by striking
9 ‘‘through 2009’’ and inserting ‘‘through 2014’’.
10 (2) SUNSET.—Section 506(f) of the Trade and
11 Development Act of 2000 (Public 106–200; 114
12 Stat. 303 (7 U.S.C. 7101 note)) is amended by
13 striking ‘‘2010’’ and inserting ‘‘2015’’.