Article from from ISME Blog Posts
Word reaches us that someone has turned up the heat at AIB bank. No, not the office thermostat but the intensity of their pursuit of debtors has gone up a notch or ten in the last few weeks we have been told. Though the rest of us may call it the Season of Goodwill, AIB begs to differ. The bank is being far more aggressive in trying to collect overdue loans from ordinary people whose lives, livelihoods and businesses were destroyed by AIB along with other banks. And of course not one person from AIB has ever been charged with this economic treachery.
This new level of pursuit of loans is sadly all the more ironic because AIB won’t be paying its debts for many years to come. Yesterday, AIB’s CEO, Bernard Byrne, told us that “management is creating a customer-centric, sustainable bank with a sustainable margin which will in time see it fully repay the state’s €21bn capital injection over a 5-10 year timeframe.” Those billions of Euro were lent by us, the taxpayers, to AIB in 2008. So already they are 8 years in arrears with another 10 to go, so 18 years in total. So it’s one law for the banks and one law for Sean Citizen. And remember that AIB is 99.9% owned by the State. The State is kicking Sean. It defies logic.
And in all of the commentary on the repayment of our money, sometime in the far and distant future, we noticed a rather glaring omission. As far as ISME can tell we are going to lose about €7 billion on this exercise. We got our ‘Back of the Envelope’ Man to do some tots for us and he tells us that taking the average figure for inflation of 3% into the future, that means for the next ten years the €21 billion that AIB owes us will be devalued by around 35% given the effects of compounding. That’s €7 billion that won’t be coming home to us but you can be sure that the Central Bank or the Dept. of Finance won’t be making phone calls over Christmas, or at any other time, warning them to cough up, or else.
We have a homeless crisis and a housing crisis in this country. But we also have a hidden crisis. That’s the large numbers of business owners who will never retire because of the debts they incurred in their businesses during the crisis. And when we say that they’ll never retire we mean that they will work until they drop, to pay back money to the likes of AIB. That’ll be the same AIB that won’t be paying back its money.
Some tout the idea of converting AIB into a Public Bank as they are currently 99.9% publicly owned. Looks like they won’t be much use to anyone for 10, 15 or 20 years.
We need new, solvent, ethical, SME and Community focused Community/Public Banks. This sow’s ear cannot be made into a silk purse unless we are going to wipe out the debt of €21bn they owe us.
Why go there; we can setup 10 new solvent Regional Public Banks for around €130m.
That’s €130m Vs €21bn
Please promote Public Community Banking - banking can be different and better.
Alex Templeton speaking at ECOBATE - UK - 2013
Councils should "bring local banks into being" so they can become "powerful partners" and promote economic, social and environmental benefits to their communities.Published on Mar 21, 2013 Speaking at the 2nd European Conference on Banking and the Economy (ECOBATE) in Winchester, Alex Templeton, Director of the Farm Energy Project, explains how a disfunctional financial system has made it harder to lend to small businesses which in turn impacts communities.