David McWilliams: Irish banks are cheating savers out of their own money
. This so-called “profit” is largely the result of cheating savers out of their money.
Why does the State preside over such unethical behaviour? Because it is trying to sell its shares in the same banks. Let’s look into the muddled thinking of the Department of Finance and the Central Bank of Ireland, the two agencies of the State that oversee the banking sector, by considering AIB, where the State owns about half the shares and wants to sell them.
You’ve heard the expression “fattening up the pig”. In the old days when people could only afford to eat meat at festive times, normally Christmas, the pig would be fattened during spring and summer, so that there’d be more meat to go around after the poor animal was slaughtered. Traditional ham at Christmas harks back to this custom. The Irish authorities are at the same game.
If banking in Ireland is so profitable and the State is facilitating this easy money, why don’t foreign banks come in and set up shop? Here’s where it gets tricky and the banks have a fair case to raise. During the crash, the courts sided with defaulting homeowners over the banks that were trying to kick them out of their homes for failing to pay their mortgages. In 2018, the Central Bankthat just 8,400 Irish mortgage holders had seen their homes repossessed since the crash, a very low figure in the context of a market of around 750,000 mortgages, of which over 100,000 were in default in 2013.
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