What was Pat Honohan saying, or trying to do to the banks?

It wouldn’t surprise me if Central Bank governor Pat Honohan was mis-quoted by both RTE and the Irish Times (Dec. 8, Simon Carswell), but, if not, he should issue a statement clarifying what he really intended to say at a recent Enterprise Ireland conference in Dublin.

 Dr. Patrick Honohan

Dr. Patrick Honohan

He forecasted a “rosy future for the banks” in Ireland, and “in due course there will be private capital scrambling into Irish banks they will be so strong”.. The banks ” will have adequate capital to convince the market that they are going ahead on their own steam, without having to rely on anyone else”

But then he also said that there (definately !!, it seems) would be capital injections into the banks next year, following NAMA, but, in spite of being a knowledgeable insider on this matter, he was unable to say whether this would include State capital or not. He then spoke about the banks maybe being forced to set aside a “further €30 billion” to absorb losses on their loans, and is quoted as stating “If Irish banks had 20 per cent of their assets more in capital (sic !!) – in other words, lets say, if they had €30 billion more in captial – it would have been enough”

What are you talking about Dr. Honohan? What do you want to say?..Do the banks face a rosy future without need for outside help, or do they need €30 bn. more in capital, that is about three times recent estimates?

No wonder the share prices dived after this. Good news for would be foreign predators..

2 Comment(s)

  1. Your website (blog site) is impossible to read from a purely visual standpoint, would have liked to read what you have to say, but alas, cannot.

    Richard | Jan 6, 2010 | Reply

  2. Sorry,Franchisco…we have a problem between Word Press and Firefox, every time we update the site…We are working on it…(I presume you use FireFox and do not have a problem in Internet Explorer?)

    Rgds

    Brian

    Brian | Jan 13, 2010 | Reply

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