The banking disaster will put Ireland back in the textbooks
The concept of collateral was more a ‘wing and a prayer’ than ‘belt and braces’, and now we are paying the price
There has been considerable progress in the last month in clarifying the dimensions of the banking disaster and the likely economic costs. It now looks as if the exchequer cost will ultimately exceed 20 per cent of GNP, and that Ireland’s debt-to-GNP ratio in 2014, on conclusion of the fiscal consolidation, will be well in excess of 100 per cent and back where it was in the late 1980s.
The Irish banking collapse looks, in relative...
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