The slowest review month since I started the blog; it's been extraordinarily busy time. My book of the month was Reed Farrel Coleman's 'Walking the Perfect Square'.
In Banksters, RTE business correspondent, David Murphy, and Martina Devlin, columnist with the Irish Independent, seek to chart the rise, collapse and rescuing of the Irish banking system. The story they tell is split into four parts – the origins of the crisis, an overview of each of the banks and the key banking officials, the crisis, and the fallout. Their tale can essentially be boiled down to the following:2) Property prices, especially development land spiralled exponentially and unsustainably upwards (and did not meet stress test criteria) and yet the bankers kept lending money to developers driven by personal bonus schemes and inter-bank rivalry to generate record annual profits.
3) Regulation was very light and the financial regulator failed to intervene in poor and suspect banking practices or overheated property speculation; the Irish Central Bank could not directly influence consumer spending as it did not have control of interest rates (which resided with the European Central Bank); and the political establishment were in cahoots with the developers and were not only blind to the potential problem but poured scorn on anybody who tried to warn of the impending disaster. Crony capitalism was in full swing.
4) As property markets slowed and financial crash hit, international banks stopped lending Irish banks money.
5) Banks thus didn’t have funds to lend to investors and businesses, nor did they have the means to pay back loans to international banks.
6) This prompted a share price collapse. (Between May 2007 and November 2008 Irish shares fell in value from €55b to €4b).
7) Which in turn spooked depositors who, worried that the bank might fail, withdrew their deposits to move them to a more secure institution.
8) This took all the liquidity out of the Irish banking system and reduced the share price further.
9) A run on the banks thus became inevitable without intervention which, given that the Irish government had decided that the banks could not be allowed to fail, came in the form of the Irish government underwriting the entire banking network (to the tune of €440b), thus halting the outflow of deposits.
10) By guaranteeing the banks, the Irish government in turn put the country’s future on the line, making tax payers liable for all bad debts.
11) Once the brake was in place the Irish government needed to decide how to proceed to put liquidity into the banking system. Initially it wanted to avoid recapitalisation and nationalisation and instead it tried to force mergers between financial institutions to gain economies of scale and to recapitalise the banks through private equity investment.
I'm in Galway today at a conference on the relationship between the public policy and the social sciences. I turned up to find I was meant to be giving the 15 minute introductory speech. Sometimes it pays to actually read the programme and the advance material that conference organisers send through! What they got was a hastily constructed, half-baked, back of an envelope address. What I got was a new manifestation of the crisis management lifestyle that I seem to be leading these days. Not a great way to stumble through life, but there we go; sometimes it's probably not a bad thing to look like a twit ...
After a number of years as a cop in the New York Police Department, in 1978 Moe Prager is invalided out after busting his knee slipping on a piece of carbon paper. His brother Aaron wants Moe to join him in opening a wine store, but they’re short of the money required. Then opportunity comes knocking in the form of Rico Tripoli, his former partner. The son of one of Rico’s in-laws, the politically connected Francis Maloney, has gone missing. Finding Patrick Maloney will not only provide some cash and an easy route to a liquor license, but the chance to once again play being a cop. The only trouble is, Patrick Maloney seems to have vanished off the face of the earth. Trying to uncover his life before he disappeared is equally vexing, Patrick being somewhat of an enigma. To add to Moe’s woes, the case has two other thorny issues – first, it’s clear that he’s caught up in some other game and, second, he’s falling in love with Patrick’s sister. What he needs is a way to extradite himself whilst keeping everyone still sweet.
After two days of catching up with family, this post comes to you from a coffee shop in Birmingham airport whilst I wait for a flight home. After a late night I'm somewhat worse for wear, so this really will be a lazy Sunday service. The party was a great success - it's a funny experience being at an event where you're related to pretty much everybody in the room. At one point the folk on the dance floor ranged in age from 96 to 6! Other than writing my posts here this week, I've written some for a new collective blog - Ireland After NAMA. If you're interested in how the global recession has been playing out in Ireland, then this blog should hopefully provide an informative read.
I'm travelling today to attend a 70th wedding anniversary celebration this evening. I'll be happy if I make 70 years, let alone being married for that long. You can tell this kind of anniversary is pretty rare as the naming at the top end of the scale starts to get a bit ropey - 60th and 65th is a diamond anniversary, 70th is platinum, and 75th is back to diamond. 80th is oak apparently. I can't imagine there are many oaks around (and even with life expectency going up, so are separations so I doubt they'll be much of a growth in numbers in the next few years). I'm looking forward to catching up with folk and also the journey as I'm planning on getting tucked into some fiction - which has lost out to academic stuff recently. I'm hooked into Reed Farrel Coleman's 'Walking the Perfect Square' at the minute.
I've spent most of the week reading a manuscript for an academic publisher who wants to know whether to go ahead and put a book into production. For obvious reasons, I can't share the review here. I usually perform this role two or three times a year. To tell the truth it's an awkward task. It's one thing to review a book proposal or a sample chapter when the book has not yet been written. It's another to have to make a decision on a 3-400 page manuscript that has probably taken someone the best part of two years to write. The author has vested a lot time, energy and emotional toil into a work that seemed like a relatively sure bet of publication (they will have received a conditional contract on the basis of a proposal) and yet the book can fall at the last hurdle. Thankfully the manuscript I was reading, whilst it had its faults, was an interesting read and I expect the publisher to nod it through to production on the basis of a few revisions. I'll get back to open reviewing next week.
