Super Tuesday

The world and its mother will be looking towards Dublin and the Central Bank/Department of Finance/Financial Regulator/NAMA fun fest, wherein we will discover:

  1. Governor Honohan's report on the future stability of the Irish banking system;
  2. The new Financial Regulator, Matthew Elderfield, will outline the new Tier 1 capital requirements for Ireland's banks, amongst other new oversight mechanisms;
  3. Minister Lenihan will let us know exactly how much AIB is going to cost us, in addition to Anglo's 9bn or so. We might get direction or information on NAMA's valuation process, and we'll certainly know the extent of the discounts being applied to the loans being transferred into NAMA.

Hopefully someone will ask: all of this effort by the state has been to shore up the damaged balance sheets of Ireland's banks on foot of the guarantee of September 2008. Now that cleanup operation is moving in earnest, the commercial property elements of the banks' balance sheets are being expunged by a combination of bad-bank asset transfer and cash-injection(s).

Now, even if that all worked well without the many problems Comrades Whelan, Lucey, et al refer to over at their little-visited internet cubby hole for lefties, the fact remains that  the residential property sector is going to become a drag on banks' balance sheets sooner rather than later, creating the need for a NAMA 2.0, and more injections. This is inevitable. Would someone please ask: what then?

Super Tuesday it will be, no doubt.

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