We shot the English for less...*

With losses of €17.7bn, Anglo-Irish Bank today posted the largest corporate losses in the history of the state.

The announcement came ahead of the Irish Central Bank's release of forensic stress tests which are expected to expose losses across other Irish banks, including Allied Irish Banks (AIB), Bank of Ireland, Irish Life and Permanent (IL&P) and the EBS building society.

So far, Anglo-Irish alone is understood to have cost the Irish taxpayer around €30bn. Anglo’s former chief executive, David Drumm, will also face questions today and tomorrow in connection with debts claimed by the stricken bank and his declaration of bankruptcy in Massachusetts.

Stress testing is expected to reveal that 44,000, or 5.7% of homeowners, are at least three months behind with their mortgages. And the value of these arrears? A staggering €8.6bn.

Based on an assessment of the ‘worst case scenario’, stress-testing is designed to ascertain whether or not the banks can withstand a particularly rough period of economic turbulence. Capitalisation is almost always the key to passing these stress tests: banks need to demonstrate an ability to absorb losses down the road while continuing to conduct their business as usual.

Often employed as a confidence-building measure, stress testing is normally an unremarkable corporate risk-assessment practice.

However, in light of both AIB and BOI being given a clean bill of health in EU-wide stress tests last summer and given that this report's conclusions may be based on false and flattering assumptions about the state of the economy and mortgage default figures, the value of the Irish Central Bank’s analyses may be questionable.

Certainly, there is clear evidence from pollsters in Ireland that most people simply don’t trust that these stress tests will reveal the full extent of the parlous state of Eire plc’s balance sheet. One online poll conducted by thejournal.ie suggests that around 80% of its readers just don’t believe that we have bottomed out just yet. There seems to be little public faith in this confidence-building measure.

It’s not even melodramatic anymore to say that this bailout and its venal architects have signed Ireland up to bonded servitude for decades; a debt that can never be paid and another generation scattered to the four corners...It just seems to me that down the years -- from the White Boys of Killala to the South Armagh Brigade -- we were happy enough to shoot and bomb the Saisneach out for much lesser effronts...

*Courtesy of The Fenian Telegraph