David McWilliams: No future for our banks without radical thinking
Published 13/04/2011 | 05:00
DO you find it strange that as a result of reckless lending at AIB, 2,000 people will lose their jobs, yet as a result of the same lending, the bondholders of the same AIB will lose nothing?
Some of the workers who supplied their labour are allowed to lose everything, yet the creditors who supplied capital lose nothing. This is not what capitalism is about. This is a type of cronyism.
In a country where unemployment is running at 14pc while at the same time running a balance of payments surplus, this is clearly the wrong choice to make. Yet we have just made it. We would save much more forcing a debt-for-equity swap on the bondholders than laying off the workers, but we do the opposite. Why?