Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
CENTRAL BANK GOVERNOR Patrick Honohan has said that it would be “unwise” to blame the huge bank debt assumed by the State for the current situation of the Irish economy.
The governor said that much of the deterioration in State finances has been due to reasons other than the jump in debt caused when the government took control of a number of financial institutions on the brink of failing.
In a speech this evening, Honohan noted that the economic crisis has adversely affected most people in Ireland.
“Since the peak in 2007-8, average living standards have fallen by some 17 per cent, and aggregate wealth has fallen by an estimated 59 per cent,” the governor told the Limerick Law Society.
“The peak activity levels reached by the economy were altogether unsustainable, and it is unwise to expect too much sympathy from outsiders for the fact of having fallen back after such a rapid run-up”.
Honohan said that people on lower incomes had been more adversely affected than the rich.
He also said that the private sector in Ireland was not alone in accumulating debt during the boom years.
However he said that by easily sourcing money from abroad thanks to Ireland’s strong credit rating, Irish banks were happy to accommodate demands for loans from both big developers and people who had bought houses to get on the property ladder which seemed to be “soaring out of reach”.
In the speech on household debt, Honohan was critical of the bank guarantee scheme of September 2008. The governor cited the extent of the guarantee, the cast-iron nature, and the lack of consultation with partners as problems with the catch-all guarantee. However he added:
But what cannot – in light of subsequent events – be doubted is that there would in any case have been irresistible pressure from those partners to ensure that losses would not fall on depositors or senior bondholders, given the fragility of banking worldwide in those frenetic weeks of September and October 2008, and indeed, thereafter.
And:
Whatever about the merits of such an international policy, it has been in place ever since, greatly expanding the indebtedness of the Irish State.
The governor of the Central Bank used some unusual metaphors to open the speech at the Limerick Law Society tonight, saying:
How quickly the lubricant of credit turns into the millstone of debt, the slingshot of leverage into a lethal boomerang.
Honohan has a history of using elaborate metaphors and literary parallels in speeches. In February he compared the disastrous economic experiences of the Irish people in recent years with the misfortunes in classic folktales.
To embed this post, copy the code below on your site
Fantastic. Looking forward to it. Weather is fresh and dry too which is perfectly normal for winter time.
@Marvin Dollery: Thank you for explaining that fresh and dry weather is normal for winter. If you hadn’t, how would we have known?
@Marvin Dollery: Tell me this Frank,what department do you work at in The Journal ?
@HisMastersAlibi: I think you meant to address that to Brenda. I wouldn’t work for such a lefty organisation.
@Marvin Dollery: For somebody who does not like this ‘lefty organisation” you certainly appear to spend your days visiting this site and giving it click after click after click.
You are a troll Marvin. Only a troll would behave as you do.
Do you have the back bone to admit to being a troll? I doubt you do. Your type are weak.
Go on Marvin, admit to it or are you too weak minded to do you? Do you lack the back bone little troll boy?
@Marvin Dollery: nah Frank,you are a plant,along with all the other names you comment under. It’s becoming clear you are part of the journal and its commitment in keeping a flow in the comments section for clicks. That’s what the journal needs as it sure is losing money. Ye should of sold it when ye had the opportunity. Who ever came up with this idea needs to be fired.
If you’re in Kerry, drive down to the Dark Sky Reserve in Ballinskelligs. It’s quite far out, but absolutely worth it on a clear night! I was incredibly impressed at how well my Pixel 8 Pro was able to capture the sky with the Astrophotography feature.
@Daniel Skelton: Anywhere from Caherdaniel to Waterville on a clear night is a pilots view of the universe. Absolutely astonishing!
Clouds are being bussed in from overseas right now…
What direction?
@Nick Bowie: Up, I think…
@Mike Finnegan: very good…
@Nick Bowie: “The Geminids will appear to originate from a point in the south east.” (quote from astronomy Ireland.)
(They’re named after the gemini constellation, from which they appear to originate.)
Will look up, but is the meteor shower going to be above or below the clouds? Existential question
Unfortunately it’s cloudy where I am. But a few years ago (2018? 19?) I counted 27 in about 20 minutes. It was fantastic. And bloody cold!
have your say