From those incorrigible subversives at The Wall Street Journal Digital Network – One way to end Irish crisis — let banks go bust:
Missing in the 88 pages the Central Bank of Ireland has produced in determining that the Irish banking system is undercapitalized by some $34 billion (24 billion euros) is a different way to end the euro-zone nation’s financial crisis.
It’s an elegant and simple solution, and one that could prove cheaper: Let all the banks collapse…
Ireland has already injected 46 billion euros into these lenders, and the European Central Bank and the Central Bank of Ireland combined have loaned roughly 175 billion euros. Let’s call it day and let them die, Lehman-style.
What about Irish depositors and companies? Their holdings can be guaranteed for a short period of time, say a month, to transfer money elsewhere, to banks in Germany or France or Cyprus for that matter.
A euro is a euro is a euro, right?
… That said, the proposed solution won’t ever be adopted, owing both to the Irish government’s fear of the unknown as well as the international desire not to see bank creditors in Germany, France and the U.K. suffer.
But the average Irish citizen, it would be better off for the nation to call it a day in banking — it may be no fun asking for a loan from a Rolf or Pierre, but it’s better than writing the check yourself.
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