Irish bank bail-out outrage du jour comes courtesy of Guido Fawkes.
The British political blogger has unearthed a purported copy of Anglo Irish’s foreign bondholders as of October 15 — quite a feat given Ireland’s finance minister Brian Lenihan once said he was unable to do the same.
Appearing on the Fawkes list — SEB Asset Management, Pioneer Investments Kapitalanlagegesellschaft, WW Asset Management GmbH and — shock! — Goldman Sachs, along with BNP Paribas, AllianceBernstein, Credit Suisse and so on.
Along with the list, comes this question from Fawkes:
Between them they hold Anglo-Irish bonds with a face-value of €4,034,756,880. Shouldn’t they take the hit rather than future generations of Irish taxpayers? Capitalism is a system of profit and loss, they took the risk of investing in Anglo-Irish Bank. Is the Irish government under pressure from the European Central Bank in Frankfurt to protect German investors?
Meanwhile, Zero Hedge is frothing at the mouth that Goldman is included on the list. Outrage hinges on whether or not one considers Anglo Irish to be a systemically important institution — Guido and Zero Hedge think not, others of course, think yes.
We think a slightly better question is why Allied Irish Banks — that other beleaguered AIB acronym — was able to pass the CEBS-administered European banking stress tests.
These were conducted over the course of the spring, with results published in July showing Allied Irish passing with flying colours. That was just two months before the Irish government unveiled a new capital injection of €3bn.
Anyway, we bring it up because on Sunday, someone has asked it:
(Breakingnews.ie) A Labour MEP is to write to the EU Competition Commissioner to find out why the Commission gave Allied Irish Bank the all clear in July only for the bank to require billions earlier this month. Alan Kelly has said Europe’s failure to anticipate the development is very worrying. Mr Kelly said: “The fact that AIB passed the stress test raises many questions.”
CEBS, you got some ‘splainin’ to do.
Related links:
Moody’s looks to Finland – to explain Ireland, Spain – FT Alphaville
Top o’ the Credit Ratings To You – Guido Fawkes, 2008
The fate of Anglo Irish sub-debt – FT Alphaville