A great post here from finance blogger Golem XIV, discussing the roots of the Irish crisis, and ‘jurisdictional arbitrage’ by German banks in Ireland, which shows that the Irish crisis was not self-contained, but fuelled by German banks looking for lucrative and high-risk investments.
Sachsen Landesbank collapsed due to around $30-40 billion in bad sub prime loans its Irish subsidiary called Ormond Quay had made in the U.S. OrmondOrmond’s collapse caused the immediate collapse of one of Germany’s Landesbanks. Which suddenly sent ripples of fear through all the other Landesbanks as the world woke up to the rampant idiocy that the Landesbanks had been getting up to …in Ireland.
Of course, Golem also makes the point that we shouldn’t be caught up on nationality. It is, first and foremost, a question of class.
They are bankers losses. It is NOT a question of Irish or German. It is question of wealthy bankers from all countries not just Germany (almost every nation, Germany, America, Russia, France Britain, we did dirty work in Ireland) and their corrupt Irish helpers versus the people. It is not a question of should the Irish people or the German people pay. Neither people should. It should be the bankers who made the losses who should take them.
The blog as a whole is worth checking out, and he also has a book out. Below is an excerpt from a video on mathematics and economics from the same guy.
