We do not need a bad bank. We already have eight of them (or seven if you believe what Eugene Sheehy says about AIB being able to survive all of this).
Bad banks are of no use. They are like bad shops.
We need one good bank. And we need it to be targetted at the key sectors of the economy which generate critical economic output. Those are the sectors that create wealth from nothing. These are the sectors that I can think of – Agriculture. Fishing/Aquaculture. Manufacturing Industry. Knowledge sector services. And certain tourism projects. (Hotels, fun parks etc.. does not count).
Such a bank should be modelled on the Old Industrial Credit Corporation. It should be prepared to invest as a venture capitalist. And it should also be able to provide shrewd business advice to entreprenuers who want to get businesses working. It should also be allowed have some input into what is happening in tertiary education.
Simply put, this is a bank that has nothing to do with property, speculation, credit cards, lifestyle loans, holiday loans, etc…Leave all that nonsense to Gillian Bowler, Richie Boucher, etc…
Just need one provider of credit to sustainable growth sectors with the purpose of increasing national output.
AIB and Ulster bank do some work in this sector, and have historically been the most useful banks in this area. But AIB will be low on reserves for a while as it digests bad loans. Ulster Bank was doing fine until RBOS took it over, and turned it into a building society – at exactly the wrong time to do such a manouvre. Most of the other banks avoid this area. The ACC is the only strong bank that has sufficient expertise in this area-enterprise banking. It is owned and managed by Hollanders. Basically the bank with the least D4 mentality at corporate level, is the most useful, to Irish society. Should we be surprised !!!
The government already has one bank which it can mould into whatever it wants to:- Anglo Irish Bank. If it sees a sector it wishes to service, all it has to do is tell Anglo what it wants done and Anglo – now State owned – can go and do it…
Only 1 good bank will in all probability not provide sufficient credit to replace that of all the existing banks. The whole idea behind the bad bank is to get existing banks lending again.