The fears over the Anglo Irish Banks loan portfolio started a chain reaction that ended in the Irish government guaranteeing all banking deposits, personal and corporate. What a master stroke! The Irish banks are enjoying an inflow of the world’s most precious commodity right now…capital.

The Irish cabinet took briefings from the head of several Irish banks the afternoon before the move was announced. The liquidity in the system was drying up fast and a possible bank run looked likely after the first refusal of the US Congress to pass the bailout package. This was the story…the state guarantee, eventually, was the result.

They won’t be telling many Irish jokes in Westminster this year….no…this year there will be gnashing of teeth and the prospect of nationalising more UK banks thanks to the unilateral Irish move to give a government backed guarantee to all Irish bank deposits. Gordon Brown was furious and demanded that the bill be reversed. Reportedly, Brian Cowen, the Irish Taoiseach reminded Mr Brown about the unilateral way he behaved over the Northern rock Crisis. Game over.

The British Pm is worried that there will be a flood of money out of British banks at exactly the time they could least afford it…and you can see his point. Brian Cowen said that Ireland simple had to look after their own banks…sorry about that Gordon. It has a kind of “we’re going to do it to you before you think of it and do it to us” feel about it.

In the first few days after the move, the noises coming from Westminster were very different from the ones coming from the Dial. Westminster said it wouldn’t matter much (why all the fuss then?) and the Dial and the Irish treasury said it had seen a large swelling in the number of account openings. One large European company has reportedly transferred half a billion Euros in a single transaction.  By acting in the way it did, the Dial made sure that all Irish banks would be recapitalised before the financial tsunami that is engulfing us all hit its shores with a vengeance.

It’s looking more and more likely that the UK will have to follow suit as Germanys chancellor Merkel, after chastising Brian Cowen for his unilateral bank guarantee was forced to give a similar guarantee to German depositors…how embarrassing! This week will tell if the UK banking system needs such a guarantee…if it doesn’t get it, the stream of money flowing to Dublin from the city could turn into a torrent if any more nasty surprised turn up.

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Tags: Bank of Ireland, Banking, Ireland, UK Banks

The Celtic tiger has turned into a pussycat…its official. Ireland, after a decade or more of break neck economic expansion has slammed on the brakes…and how! It is the first euro zone country to slip into recession and my bet is that it won’t be the last…far from it. Everything has turned south…the service sector, manufacturing, construction, financial services and housing. The banks are they latest to fall foul to the global economic meltdown…with some so close to the edge that a state guarantee of their assets was deemed necessary.

The trend in recent year has been the reversal of the out flows of Ireland’s best and brightest who lerft in droves in the 70s and 80s for any work they could find. You couldn’t walk through Dublin airport without seeing a huge poster begging the brains not to get on the planes back to London and New York after the Christmas holiday to see mammy and daddy has finished. Can this trend reverse once again? It will…if the high tech companies that have called Ireland their European base up stick and jump on an Aer Lingus plane with a one way ticket to Lowtaxville.

Ireland was the jewel of the Euro zone project. The shining beacon to the Baltic States, Poland, and the former soviet republics of Latvia, Lithuania and Estonia all eyed Ireland’s remarkable economic turnaround with envy and sweaty, anticipatory palms. “We’ll get ours soon” they all thought, as they admired Ireland from a far like a shy teenager admires the prom queen from across a dancehall.

In reality, they are unlikely to get anything close to what Ireland enjoyed, perhaps with the exception of Latvia which enjoys a well educated workforce and low corporation tax rates. Ireland had a convergence of good fortune and a long time in building a solid base for the prosperity it enjoyed. It trained it workforce, build out its infrastructure with the help of EU handouts and was able to push the corporate tax burden onto its well paid citizens while giving its corporate “guests” a bit of a carrot to do business in Ireland in the form of too hard to refuse corporation tax rates.

The bursting of the property bubble and the slump in construction jobs may well signal a different future for Ireland from its boom times. Will the Irish government be able to resist the temptation to increase corporation tax rates…just a little…to soften the blow to the treasury of all those unemployed former boom town builders who now live off state benefits?

If they can’t resist, it will ensure that the recession becomes deeper and more profound as the very foundation of the Irish boom, well paying high tech jobs from large US tech companies, shifts from rock to quicksand…just as Latvia welcomes Microsoft and Google executives with open arms, keen workers and empty wallets.

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For More information on specific Banks use these links

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

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For all the best deals on Current bank account, Business bank accounts, Savings and Mortgage deals visit the number one Independent Bank Compassion site Bank—Accounts

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Tags: Bank of Ireland, Construction, Financial Services, Housing, Ireland, Manufacturing, Service Sector