In Reply to: re: nama pay rise posted by Daz on March 19, 2010 at 11:38:00:

It is the banks that are been bailed out by NAMA, not the builders. Why are they bailing out the banks. It is the preceived wisdom in the western world - in the UK, US, Germany and in Ireland.

We can argue all we like on this point (and I waiver on this), but at the heart of the problem is that banks worldwide are been subsidised by their respective governments (via the depositors' guarantee).

Imagine, if you wish, that the banks did go to the wall! Imagine telling the depositors that they are not senior obligations and that some bondholders are to get paid first! Without the government guarantee that is their ranking.

So if the banks failed, the government would be underwriting all of the deposits in these institutions without getting any benefit. Senior bondholders rank higher in the security line.

In addition, if the banks went to the wall, there would be forced selling of property assets, causing more downward pressure on the property prices, causing more people to get into trouble, causing more selling ......... etc.

I generally agree with your last paragraph but there are wider consequences to bankruptcy of financial institutions.

But I don't believe your "scam" claim. I am not sure the builders (I presume that is who you mean by FF bankers) and FF are not benefitting from remaining in government.