Anglo & INBS are now fake banks with their banking licenses retained solely to prop up their ability to borrow from the euro system and for no other reason.
These ‘banks’ are made up to look like some quasi real entities by a fake lending scheme (ELA) which was conceived by the complacent Government and Central Bank with a nod of the conveniently ‘see no evil’ ECB.
The sole objective of this scheme is to continue faking the system stability of the Euro area banks many of which are now barely alive themselves. The scheme operates like some Madoffian Dream with banks pretending to use collateral (which in effect is rather dodgy in many cases and assumes that Spanish Government bonds are as risk free as German Government bonds) to borrow money they can’t really be expected to repay (does anyone really think LTROs 1 & 2 can be unwound by calling in the loans or liquidating the ‘assets’ repoed?) so they can buy more Government bonds and put borrowed money on deposits, thereby creating fake demand for Government bonds (lower yields lead to a pack of idiots claiming that Government debt is now sustainable as its cost ‘came down’) and increasing headline ‘deposits’ figure for ECB (pretending there is no liquidity shortage in the system).
Of course, the very reason for this ever-growing pyramid of deception is the very same as the underlying cause of this mess – a currency union conceived solely to promote political objectives of the ever-expanding EU. Nothing else.
The only real thing about this mess is the money Irish Government takes out of the pockets of its residents to dump into this pyramid. Nothing else.
To use a literary analogy, it’s not that we are about to hear a child scream ‘The King Has No Clothes’ that is the most apparent feature of this circus. It’s that we have NCB, ECB, National Government, EU Commission and Parliament and courts all acting up in collusion to deport all children from the town, lest they might see that the king is, indeed, naked.