Why removing the state guarantee is a bad idea

I was really disappointed to hear that Jack O’Connor of SIPTU and Sean Sherlock of the Labour party had brought the idea of ‘removing the state guarantee’ into the public arena regarding PTsb in retaliation to their 0.5% hike in the variable rate they are charging their customers. The outcome from a removal of a state guarantee could be catastrophic and in this post we hope to demonstrate this.

Before that though, it is vital to remember that there is no ‘price promise’ with a variable rate, the margin is not tied to the ECB – a mistake many borrowers made when expecting rate cuts as the ECB lowered the base. The margin on a standard variable rate is determined by the lender so this is case of the bank doing what it is entitled to do, they didn’t break tracker agreements or any loans that didn’t implicitly allow it, so on one hand the bank is acting within its rights.

The other thing to remember is the contradiction …

Read More

A tale of two bankruptcies

This is an interesting video by Fault Lines called ‘A tale of two bankruptcies’ and it looks at how, in the face of financial pressure a bank is treated versus how the regular US family is treated. This is not comparing like for like but it does point out some of the reasons for widespread anger in the US about the way that tax dollars are being spent.

Read More