Sunday 17 December 2017

A new bank system will emerge from wreckage

We need fewer banks and a good fiscal consolidation plan, says Colm McCarthy as he outlines his steps to achieving a recovery

He's off the fence! Yesterday's March against Austerity marked a reassuring turning point for a grateful nation as Christy Moore finally broke his silence on Ireland's latest crisis. Christy is against hardship.

Those unable to attend Christy's performance included the team negotiating with the international bodies on which we must now rely to finance the State and the banks. The talks with the IMF and the European institutions are expected to conclude this afternoon and there has been fevered speculation about the terms, including the interest rate to be paid.

Countries that enter bailout programmes, due to inability to borrow, need an exit strategy. The reason why countries resort to official lenders, normally the IMF, is because their prospective debt levels cannot be financed in the markets, at any interest rate. The solution usually contains three elements, emergency lending at a low interest rate, writing-off of some debt, and a tight budgetary policy to ensure that further debt accumulation is kept to a minimum.

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