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Updated: 12.38
THE FORMER HEAD of the Department of Finance has hit back at Alan Dukes over the Siteserv deal.
John Moran issued a statement today after former Fine Gael leader turned IBRC chairman Dukes made critical remarks about him in a press conference yesterday.
Dukes said that Moran, in a private conversation, expressed a wish join the IBRC board shortly after becoming secretary general at the Department.
He said that at one stage Moran wanted to appoint two further directors to the bank and “seemed to believe that all he needed to do was tell the Central Bank that it was okay to appoint these two people and that they would be on the board”.
When asked if the deterioration in the relationship between the department and IBRC could be traced back to Moran’s appointment, Dukes said:
It definitely took a turn for the complicated at that point.
Moran, who has been out of the country all week, said that Dukes’ comments represented “pre-crisis mindset”. He said that civil servants had “been asking the right questions”.
I would simply add at this stage that I find it regrettable and a step back to pre-crisis mind sets among bank management that what seems to have been happening today are personal attacks on civil servants asking the right questions who were representing after all the new shareholders of those banks, the taxpayers.
It might have been better to have the time available used to deal with the substance of the issues raised by both the Department and other public representatives.
I shall be happy to answer any other important issues after reading the transcripts or at the upcoming inquiry into the management of IBRC if more appropriate.
Speaking on RTÉ’s The Business today, Dukes said that some in the Department saw Anglo Irish Bank as “the enemy” after the nationalisation of the bank.
‘Overly arrogant’
Fianna Fáil leader Micheál Martin also criticised Dukes, saying he was “overly arrogant in terms of his dismissive attitude to our public servants in the department of finance”
This is getting hilarious at this stage. At what stage are all these supposed “intellectuals”, “intelligent politicians” and lest we forget the blessed academic insulated economists, going to get it! It aint working lads, so I know uprooting the whole system puts all your publicly paid gravy trains at risk but sher that’s just tough! Wait for Italy to go caput next and then just wait for the meltdown. Any chance the journal would get all our learned economist friends like Mr Whelan on here? Didn’t he tell us we’d have €700 billion at our disposal if we voted Yes? There’s €100 billion gone already and markets are still tearing Spain apart. You just have to question credibility at this stage! Oh dear oh dear, everyone feathering their own nests while Europe burns!
thank god for all the intuitive geniuses who write on the journal
That 700 billion alone will only last for Spain. Italy and France are in the waiting room.
Hence my policy not to invest within the Euro zone.
In the longterm the Euro will falter as we know it.
That is of course just my opinion.
What is yours?
Joe, there’s no need for any intuition here. A cursory study of economic history clearly demonstrates that there is no easy or painless slution to this crisis.
Over eighty years ago, Ludwig von Mises forewarned the Wall St. crash with this now ominous quote. “There is no means to avoid the final collapse brought about by credit expansion..”
We have just lived through the largest expansion of credit in the past 40 years. Expect a collapse of similar scale.
Just looking at Richard Bruton here on tv3 news saying that the Spanish bailout has stabilized the situation are they for real this government, we need to get out on the streets enough is enough
Sure in fairness Richard is talking bull. Sure wasn’t it the fiscal compact that was going to provide stability?
So which countries have signed up for the fiscal compact? Greece? Yes. Spain? Yes. Ireland? Yes (or soon to do so as the referendum was passed). Portugal? Yes. Anyone notice a pattern her? Have any other countries ratified it?
It’s all about the positive signals, and the stability, we’ll be graaaaaand. There are positive signals everywhere now, nothing to worry about. It’s sorted.
Economic issues like this will lead to massive social upheaval, my money’s out of Irish banks! And have started to become fully self sufficient for food … City folks will look well when the powercuts come
In 1971, the gold standard system, established at Bretton Woods, was abandoned in favour of a fiat currency system with the US dollar positioned as the global reserve currency. This allowed the US to bridge funding gaps, caused by the cost of funding both the Vietnam war and the ongoing Cold war with Russia.
The world benefitted greatly from this momentous decision.
Firstly, the US, liberated from the monetary shackles of the gold standard, could finance enhanced military expansion/adventurism without subjecting American voters to onerous levels of taxation.
Secondly, fiat currency offered enhanced economic capabilities to central planners (governments, central banks). The volume of currency supplied into the economy could be increased to stimulate growth (monetary easing) during recessionary episodes. This was particularly opportune for nations like the US & Britain as their domestic manufacturing industries were in decline in the 1970′s. In both these nations, uncompetitive businesses were allowed to fail as any economic impacts were, or would be, mitigated by a, soon to be, thriving banking and financial services sector courtesy of the enhanced monetary capabilies now available to central planners.
An anomaly of fiat currency is it’s requirement for constant monetary expansion and it’s propensity to generate credit fuelled booms and debt. As fiat currency holds no intrinsic value, to ensure monetary stability all new currency is issued as debt. Central banks issue new currency to governments and Market participants as collaterallised debt. To allow for repayment of this new currency (debt) the volume of new currency must constantly increase (constant monetary expansion). Needless to say, the rate of monetary expansion has increased exponentially over subsequent decades.
http://www.chrismartenson.com/crashcourse/chapter-8-fed-money-creation
While governments issue bonds to their central banks to access new currency, Market participants faced increasing difficulty sourcing, the expotentially increasing quantities of securities required to access new currency. The danger of a collateral drought were that the wheels would come off the accelerating fiat currency merry-go-round.
In the US, this problem was overcome by issuance of toxic securities. In many cases these were facilitated by the expanding subprime mortgage market.
European banks, as well as trading in toxic securities also, accessed collateral via the government bonds of nations, whose creditworthiness had recently been enhanced, such as Greece. Also, newly created collateral courtesy of credit-fuelled property booms in countries such as Spain and Ireland.
Ron Paul!
Bring back the gold standard
I don’t entirely agree Dmc. The twentieth century was dominated by two currency systems (or variants). Firstly, the gold standard up until 1971. This was abandoned because it did not provide enough liquidity for free-spending governments and properly functioning economies at the same time.
Then fiat currency which we will soon see disappear down a sinkhole of inflation and debasement.
The ideal solution is a currency system where the supply of currency matches the demand for currency. While there is not an oversupply as we currently have now with paper money.
Mexican Hugo Salinas Price has suggested a hybrid duel currency system. This involves the issuance of paper currency long side the issuance of silver coins.
US Professor Larry White goes a step further, suggesting complete liberalisation of the issuance of currency.
Either system could prove extremely useful for Ireland in the near future.
http://www.freebanking.org/2011/09/13/the-free-competition-in-currency-act-of-2011/
Why can’t the create a separate vehicle for bailing out banks on their own? Think we might have had a glimpse of what would happen this morning. Spanish bond yields fell until it became apparent that Spain, and not it’s banks, was on the hook afterall
The EU/ECB had a chance in 2009 to resolve this, by being radical then. They refused and dithered, looked at the German economy, saw it was doing fine and left it at that.
The problem festered and grew, growth collapsed under austerity and the debt remains. Now growth is stalling across all countries, including the so called core. Holland heading in to a recession and Germany will as well.
This is funnier than my Fr Ted boxset!!! All this crap is caused by fear and stupid clowns gambling with the stockmarkets. The funniest thing is governments know this but wont do anything about it!!!
Batten down the hatches! This is going to be a bumpy ride. The euro in its current form looks doomed. No more band aids left. The game is up. The euro political zombies have bottled it.
there is one simple, tried and tested solution and its called bankruptcy.
The conspiracy theorists think this banking crisis is to force the countries into a united states of Europe controlled by the big banks..what a ridiculous idea. Idiots!!
Although who s running Greece and Italy at t moment…hummm, nah it couldn’t be bankers??
Waterford do ur homework it’s actually not a theory anymore it’s fact . The bankers are actually sucking the world economies dry . It’s down to fiat currency and for fiat currency to survive it must always have ppl spending that’s why you have Christmas valentines day paddy s day Easter the currency must always be circulating . There’s no solution fiat currency does not work . Our civilisation is going to collapse the way it’s going so the ppl in charge may see this as a reason to create a super communist state where everything I’d controlled .
Can we have more bandaid please, the bit we thought fixed Spain has vanished, where will it all end
have your say