How Sound is the Irish Banking System

We don't want to be harbingers of doom but, if things are to go pear shaped, is it not better to be informed for potential evasive action?

A quick browse through Construct Ireland magazine (March/April '08 issue) brought us to a piece by Richard Douthwaite on the potential for disaster in the Irish banking system. It makes pretty chilling reading. I'm not going to re-invent the wheel by regurgitating it all here but, suffice to say, Irish banks are not in the finest of rude health considering the slide into which our property market has descended and their almost complete reliance on this sector for building their asset values and loan books.

The piece is not on-line yet but probably will be in the not too distant future at the Construct Ireland website. In the interim you might like to have a look at a brief overview on just how precarious a ledge the Irish banks now stand. It is only three pages long, is not written in Cyrillic like a lot of this stuff tends to be and is by Morgan Kelly, Professor of Economics at UCD, so it does bear some weight.

There is a link to the piece here. You'll need a PDF reader to read it which you can get for free from www.adobe.com if you haven't got one.

Interesting reading if nothing else and it might concentrate the mind if you've got a lot of money resting in an Irish bank account.

www.OverseasCafe.com

Global Credit Crisis Over? I Think Not

So the global credit crisis was a bit of a blip then and everything is starting to come back to normality again? This would certainly be the feeling you would get if you were to speak to the world in general about this somewhat 'unhelpful' and 'awkward' period in our economic history. The worst that happened was that Nortnern Rock was nationalised and everything is hunky dory now. Those of us who watched Channel 4's Dispatches programme 'How the Banks Bet Your Money' might be left with a somewhat different opinion.

This was a real eye opener into how deeply the credit crunch is being felt in the US. To see in stark reality how many houses are being repossessed right across this vast country puts into perspective the absolute human devestation being created by the short term greed of our financial institutions.

The problem is, this is not going away anytime soon. The losses which have been clocked up by the financial institutions will be calamitous and unsustainable for some of them, so you'd better be wary if you're snapping up bank shares because they look very cheap right now. The worst is, apparently, yet to come and some of those banks may well not be in existence in a few years time.

The dispatches programme is highly recommended viewing if you want to get something of a handle on this global problem that will be with us for some time yet. You can find a summary of its contents at http://www.channel4.com/news/articles/dispatches/how+the+banks+bet+your+money/1563152

http://www.overseascafe.com/