So, basically, Sinn Féin’s original position to “burn the bondholders” is now being advocated/repackaged by… Irish stockbrokers.
Irish Independent – Government must force losses on bondholders, stockbroker claims:
THE Government should immediately move to impose 50pc losses on all unguaranteed Irish bank bonds because the cost of the banking bailout has become too great for Ireland to bear, Goodbody’s Stockbrokers said yesterday.
The comments come as the political parties continue to slog it out on whether “burden-sharing” should be forced on bank bondholders, particularly those who own some €21.5bn of bank bonds that are not covered by government guarantees.
In a report yesterday, Goodbody’s warned that if the next government does not force losses on bank bondholders, then the State’s finances would become so dire Ireland would be forced to restructure the terms of Irish sovereign bonds.
“It is clear that the Irish Government can no longer cope with the banking crisis on its own,” said Goodbody’s chief economist Dermot O’Leary, pointing to the €50bn in support that’s already been committed to the banks.
His views were echoed in another 104-page report by NCB Stockbrokers which warned that the country may be forced to restructure its sovereign debt if growth is slower than forecast…
“If the Irish banks are systemic to the European banking system, then collective responsibility must be taken for solving the problems,” Goodbody’s stressed. “It is in Europe’s interest that the problem is solved.”
If Europe doesn’t support marking down Irish bank debt, they could also ease the pressure on Ireland by enabling the EU’s EFSF rescue fund to directly recapitalise the Irish banks, Goodbody’s said.