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Here is another possible scenario:

An irish bank had seen its share price drop so much that it was vulnerable to a takeover bid (presumably by Santander). The losers in this case would have been: the management (in that order).

The government decided (without informing, let alone consulting, the ECB or the Commission's competition authorities) to guarantee the debt of all 6 banks by announcing the guarantee.

This scenario makes the Irish government look even worse.

Can you think of a scenario that makes the Irish government look good and in which the management of the banks is not the primary (or sole) beneficiary?

In any case the government is disingenuous as they claim they are not "taking risks in public enterprise" as if guaranteeing debt were not exactly that.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 01:12:15 PM EST
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