The cost of the Irish banking ‘guarantee’

The Government says that the amount involved being guaranteed is €400bn.  The current standard rate for interbank credit default swap insurance is 2%.  So, this guarantee is worth €8bn per annum to the Irish banks.

The six banks could all have been purchased outright on Monday afternoon for approximately €10bn.

The insurance certificate was issued without a premium even being discussed  What kind of negotiating position is that?  We still don’t know what the banks will be charged for this ‘insurance’, or even if they’ll be charged at all if they never claim.

Can I have that sort of cover on my car insurance, please?  I promise I’ll start paying premiums when the car is totalled.

Similar posts:

    None Found