On Friday 12th June 2009 the Financial Measures (Miscellaneous Provisions) Bill 2009 was published to absolutely no fanfare or media attention despite proposing an extension to the bank guarantee. Karl Whelan of the Irish Economy blog has some interesting commentary, which can be read in full here.
Smart Taxes is currently preparing a discussion paper in relation to NAMA and was particularly interested in Karl’s comments regarding the impact of this Bill on NAMA. The temporary guarantee was supposed to save a well-capitalised banking system from a temporary liquidity problem. Now we clearly have an under-capitalised (and perhaps insolvent) banking system that is supposed to fixed by the NAMA-and-recapitalise solution. One interpretation of this extension of the guarantee is that, even post-NAMA, the government may not have recapitalised the banks properly and that the drip-feed of state support won’t necessarily end with the NAMA process.
