Ireland's banks are bust.
They were foreseeably bust a long time ago. The failure is spectacular by any standards.
The accounts of Irish banks had to be wrong when signed off at the height of the boom. They were imprudent.
Who signed them off?
AIB - KPMG
Bank of Ireland - PWC
Anglo Irish Bank - Ernst & Young
Irish Nationwide - KPMG
Irish Life & Permanent - KPMG
Why are no writs being issued?
Let's be clear - these banks failed to anticipate losses using reckless mark to market procedures that ensured they failed to comply with requirements that capital was preserved to protect creditors - the fundamental duty of all companies (over and above any duty to make a profit). The auditors were complicit in that in falling to identify the conflict between accounting requirements and company law - which in this case is the same for all practical purposes in Ireland as it is in the UK - where the same neglect took place, as the UK's House of Lords made clear this week.
So sue, I say.
What have the Irish got to lose?
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Amen. Sue the bonus-receiving individuals who made the decisions. Their bonuses signify recognition of their individual responsibility in creating wealth for their company with their brilliant decision making abilities. Therefore if they make errors, sue them. Make them bankrupt, and in doing so, a proportion of the debt (at present coming to the people) will be annihilated.
http://greenerblog.blogspot.com/2009/02/fred-goodwin-should-accept.html
Thanks for your work, Richard
It would be impossible to sue those guys. You know how ‘protected’ they are with their paperwork. They make management sign a paper that says ‘we’re not liable if something goes wrong’, and then they tell shareholders, ‘we’re not liable if something goes wrong’.
Yet somehow, they get to charge insane fees for audits and transfer pricing and tax planning.
Pretty nice racket if you can get it!
These auditors should be sued for negligence but I doubt whether this will happen. Debt relief had to be given to developing countries and the same will happen again for Ireland and Greece (and maybe Spain and Portugal). The banks now assume that they can continue their reckless policies and will always be bailed out by the state. Mervyn King was initially worried about ‘moral hazard’ in propping up the banks. He was right, but until tougher regulations are brought forward and ENFORCED we should all be worried.
What, no Deloitte? They must be gutted!
@Progressive Tax Blog
They’re in the game now – but only because E & Y got sacked
I don’t know if you’ve read Golem’s latest post but amongst the comments is one from Pat Flannery an ex-Irish banker talking about Fink who stress tested the banks … and is also supposed to have invented securitisation! No idea whether this is a story known to you or the veracity but I thought that you might be interested to check it out…. it certainly doesn’t sound right on the face of it.
http://golemxiv-credo.blogspot.com/2011/04/free-market-and-globalization.html#comments