“bank in which the family lost most of the €3 billion [] gave loans to cover those losses”

As noted yesterday, the Quinn Group’s campaign against the independent Irish Financial Regulator’s decision to appoint administrators to run its Quinn Insurance arm continues. The BBC corrals the interfering ‘foreigners’ into one report, while the Irish Times was on the streets in Cavan – where it’s worth noting the professionally produced protest signs. The administrators’ report is to be given to the regulator today – whom Seán Quinn has grudgingly conceded was “technically” correct in his assessment of the insurance company’s position. As Mack mentioned in the comments here, some people are asking questions about the arrangement by which the Quinn family’s losses on Anglo-Irish Bank shares were covered by loans from the Anglo-Irish Bank. Simon Carswell in the Irish Times

It was a disastrous investment which together with some other share investments have cost the Quinn family losses of €3 billion. Quinn has only reluctantly – and on an entirely unsatisfactory drip-feed basis – released details of the impact of that investment and how owning an indirect stake of more than a quarter of the State’s third largest bank has undermined one of Ireland’s largest insurers.

Yesterday brought a little more disclosure from Quinn – a statement from his overall business, the Quinn Group, said that “due primarily to equity losses of circa €3 billion outside of the Quinn Group, the Quinn family owe Anglo Irish Bank €2.8 billion”. In other words, the bank in which the family lost most of the €3 billion in equity investments gave loans to cover those losses. This confirmed what had been suspected for a considerable time.

Last word, for now, on the Quinn Group’s campaign, from Karl Whelan at Irish Econmy

The serious point here: We are where we are in large part due to very serious regulatory failures. If the first time our new regulator steps in and deals with what he sees as serious failures to comply with regulations, there is any sense of the government (any arm of it) stepping in to protect those who failed to comply, then this would do serious damage to our attempts to build an image of having made a fresh start on the regulatory front.

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  • Alias

    Actually, the loans were issued prior to the shares becoming worthless, so it is false reporting by the Irish Times to claim that they were issued to cover losses which had not occured. Also, the loans are guaranteed by the Quinn family, so there can be no inference that the loans as an incentive to the Quinn family to buy the risky shares. If the shares proved worthless, the family would still lose the money they paid for them.

    In addition, the European Capital Requirements Directive is the applicable law in regard to capitalisation of lending institutions and not the Irish government or its agencies, so the “lax regulation” in that article that the europhile Irish Times laments is lax EU regulation. However, it simply declines to point that out because it was the European Commission that set the leverage ratio at insanely high levels thereby allowing banks to borrow as much as they liked in order to facilitate the expansionist monetary policies of the ECB by increasing the supply of cheap credit in the economy.

    In regard to the actions of the Regulator in this instance, his actions are subject to oversight by the sovereign government (which he is not). The government should ensure that he is doing his job correctly, but nothing more. The idea proffered that the Regulator should be wholly independent of government oversight because he is presumed to be infallible and sovereign or must be seen as such is nonsense.

  • Davros

    EU sets the levels but its up each country to police them and up until this ‘foreigner’ appeared they didn’t. If Gov interferes its same old same old.

    That said if Quinn goes kaput it could be Guinness Peat all over again, Ireland left with a cadre of skilled insurance types looking for something to do.

  • old school

    I fail to see how jobs will be lost, davros.
    Maybe in the short term transition, but they will reappear
    Quinns thousands of customers will always need insurance. They will go to another insurance company, who in turn will recruit more workers.
    Supply and demand dictate job losses or creation.
    Mismanagement is a blip.
    Quinns losses will be someone else gain.
    The best remedy would be to sell the firm now,keep the jobs intact, and allow a smooth transfer of business.
    Quinn should pay his gambling debts from his own personal fortune, and not heap more ills on the taxpayer.

  • Alias

    Davos, the main Irish banks stayed well under EU capital leverage ratios, so your rebuttal is fictional nonsense. In fact, they could have doubled their average leverage ratio (21) and still have been comfortably within EU regulations for capitalisation requirements.

    A safe leverage ratio for commercial banks is about 10. Incidentally, none of the German banks have leverage ratios under 50. That’s purely EU regulation, and has nothing whatsoever to do with national regulation.

    While the EU recognised that its regulation created the problem of grossly undercapitalised EU banks, it’s amendment to the European Capital Requirements Directive did not reduce the leverage ratio to anywhere near safe levels. Why not? Because the vast bulk of EU banks would fall foul of any reduction in the leverage ratio.

  • jtwo

    If another firm picks up QIL they may prefer to have a call centre in Bangalore rather than Fermanagh.

  • jtwo

    Alias your knowledge of bank capital requirements is impressive but surely it’s the solvency requirements of insurance companies which is the key metric in this case?

  • Alias

    It’s not that impressive, actually. And I only made the capitaisation requirements point in response to the article quoted, as a correction to misleading information within it – not in response to the particulars applicable to solvency.

  • Im just trying to get my head around any one having THREE BILLION to play silly buggers or anything else with. Just give me an address to send my begging letter to please.

  • Greenflag

    pippakin ,

    Don’t waste your time with the small fry . Why not go for the gold .

    Try Bernie Madof -world champion financial swindler , thief and Ponzi Scheme supremo . There are probably another couple of hundred financier criminals in various sing sings around the USA but Bernie is top of the shite heap by more than a mile

    Bernie’s current location is

    Ponzi Master Madoff
    PO Box 1500 Butner NC 27509

    or call (919) 575-8000 for further information.

    As for playing silly buggers with 3 billion or even Bernie’s 60 billion lets not forget US Secretary Paulson’s playing silly buggers with 700 billion of uncollected USA tax payers monies last year to help the corporate thieves/bankers out of their self induced mess . And even now these same bankers are as grateful as you’d expect them to be -i.e not in the least .They still want their multi million bonuses and still want de regulation and no government interfering in their collective desire to continue to rip off the american and world consumers of whatever they have left 🙁

  • Greenflag

    No, Madoffs no good. He is doing serious time.

    AS for the rest, as culpable as they all are, I will stick with the Irish. As far as I know the Quinns have not been charged, and are not at the moment accused.

    How much room does THREE BILLION take up. I mean I have a spare room, would I need more than one???

  • Greenflag

    A 21 x 12 x 10 concrete and fireproof bunker is recommended . Also 200 security guards armed with machine guns (mexicans are economical at this time )
    Whatever you do don’t give it to any bank . They’ll find a way to steal it via the best revenue earner method i.e ‘fees’ 😉 Many bankers are still of the view that they should be allowed to continue ‘gambling ‘ with their depositors ‘savings’ .

    They have learnt not just nothing from this crisis but even less than nothing . They are still in denial re their complicit role in the mess . Preferably they should be in the Nile with millstones around their necks and fed to the crocs.;)

  • Greenflag

    Oh how I agree, just think, wages down, benefits down, redundancies, and how many bankers have retired to poverty?

  • Mack

    Quinn’s debt can be repaid via a debt-equity swap. I.e. give the company to the banks, and let them sell it.

    Pippakin

    how many bankers have retired to poverty?

    It depends what you mean. I think you are referring to the banks’ employees – in particular senior management, who milked the banks for all they could. The banks owners (the capitalists) who took a risk and invested in the banks were pretty much wiped out, completely screwed by the people they paid to run the firms.

  • [b]Strange Times always Deliver Strange Solutions which are Quite Sensible even if a Little Out of the Ordinary, which of course is only to be Expected in such Times. And the Future is Never like the Past [/b]

    [quote][i]Actually, the loans were issued prior to the shares becoming worthless, so it is false reporting by the Irish Times to claim that they were issued to cover losses which had not occured. Also, the loans are guaranteed by the Quinn family, so there can be no inference that the loans as an incentive to the Quinn family to buy the risky shares. If the shares proved worthless, the family would still lose the money they paid for them.[/i] ….. Posted by Alias on Apr 08, 2010 @ 03:11 PM[/quote] ….. Classic sub-prime loan bumbling by the bank, which did not have the necessary intelligence in its executive staff/leadesrship to realise a toxic load …….. mutton dressed as lamb?

    Yes, of course. Played for the greedy fools that they were and are, and played and bettered at their own game too, and by a unranked outsider is rubbing salt into the wound. The world is full of crap bankers who think just like politicians and assume that they lead with their views and decisions, whereas the reality is quite different and only a few are made of the right stuff.

    [quote][i]Quinn should pay his gambling debts from his own personal fortune, and not heap more ills on the taxpayer.[/i] …..
    Posted by old school on Apr 08, 2010 @ 04:59 PM[/quote] ….. In true Irish style he would be taking another mad gamble on something outrageous and left of field, to completely reverse the ill fortune and have him minting it as a lead business angel with a crazy pioneering venture which guarantees the future by virtue of what IT does to Provide Media with their Tales and All with their Reality, Virtually.

    And yes, that is juicy bait being trailed and real chum for sharks with smart future market analysts and therefore a live betatest of Quinn fitness for future foreign and alien purpose ……. and AI Live Operational Virtual Environment BetaTested Failsafe Launch of Quantum and MkUltraSensitive TelePortation Networks.

    Mick, We are most grateful for all of your help and be assured that there is a titanic amount of new information yet to come to completely amaze and thrill one and all with ITs unlimited Potential to Power Control of Current Energy and Currency Levers with SMARTer Intellectual Property XSSXXXXChanges …… Virtual Zeroday Trading of Endemic Opportunities and Systemic Vulnerabilities for Binary Fixers of Analogous Faults.

    [quote][i]As for playing silly buggers with 3 billion or even Bernie’s 60 billion lets not forget US Secretary Paulson’s playing silly buggers with 700 billion of uncollected USA tax payers monies last year to help the corporate thieves/bankers out of their self induced mess . And even now these same bankers are as grateful as you’d expect them to be -i.e not in the least .They still want their multi million bonuses and still want de regulation and no government interfering in their collective desire to continue to rip off the american and world consumers of whatever they have left :([/i] …. Posted by Greenflag on Apr 08, 2010 @ 08:28 PM [/quote] …….. Greenflag, Do you think they are at all bothered about this powder puff ….. http://cryptome.org/0001/prez-arra.pdf …… or is it just Obama covering his bony smart ass and going through the motions?

    [quote][i]Quinn’s debt can be repaid via a debt-equity swap. I.e. give the company to the banks, and let them sell it.[/i] …… Posted by Mack on Apr 08, 2010 @ 09:59 PM[/quote]

    Err, seeing as how Quinn appears to be a whole lot smarter than any bank, give a bank to Quinn and it is continued trading but under a new Renegade/Rogue/Master Regime and a much better answer and one of those dead cert bets which makes a killing in the market place for small investor punters and high roller gamblers alike. And it creates a Bank with Real Irish Grass Roots Street Savvy and bet against that and you will definitely lose.

  • joeCanuck

    Most of these failure were Ponzi schemes of a sort. Promise investors returns that are too good to be true and, since there is one born every minute, the suckers will line up to get fleeced. One minor (ha) difference is that the ones who were wise are now paying for the greed of the others, including the fleecers.

  • [b]Gordon is a Moron and the evidence is in his own claim to have saved the World and banks, for he and his Labour cronies have guaranteed their failure, with their ignorant and arrogant nonsense and media spin aka Bullshit? [/b]

    [quote][i]Most of these failure were Ponzi schemes of a sort. Promise investors returns that are too good to be true and, since there is one born every minute, the suckers will line up to get fleeced. [/i]….. Posted by joeCanuck on Apr 09, 2010 @ 07:49 AM [/quote]

    joeCanuck, it is a lot worse than you probably have ever even imagined …….. http://www.reuters.com/article/idUSLDE6380MU20100409

    And the readers comments make interesting reading too.

    And do you think that those who are standing for Parliamentary and Assembly elections, and would think that they then will control and/or lead us, know of such shenanigans and do nothing about them, and do not even dare to discuss them publicly lest the System collapses.

    Should they be advised that it is crooked and criminal not to discuss it, rather than be party, by reason of conscious omission, in the conspiracy of silence and fraud.

    And what says Sammy, the Northern Ireland Finance and Personnel Minister, on the matter ….. the “most qualified Finance Minister that Northern Ireland has had in decades”. says Peter Robinson … [url=http://en.wikipedia.org/wiki/Sammy_Wilson]Our Wee Sammy[/url]