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The whistleblower noted that “from July 2007 until… mid-September of the same year, several daily liquidity reports showed the bank to be well beneath the 90 per cent ratio” required by banking laws. He was also concerned that “breaches were punishable by a fine or a jail sentence.” As a result, he resigned his position.
The unnamed bank claimed the allegations were false, but it should be noted that the Financial Regulator, aka Irish Financial Services Regulatory Authority, which regulates all financial institutions in Ireland, “took over the entire bank for approximately two weeks.” It should also be noted that no substantial investigation of the allegations has taken place.
The whisteblower himself, or someone claiming to be him, made additional allegations in the comment section of the Wall Street Journal story on the Irish bailout, claiming that the Irish government “has made sure that the calamities that occurred at Irish-domiciled, but foreign-owned, banks will go un-investigated. Examples are Hypo Real Estate (Depfa), Sachsen Landesbank, Cologne Re. Hypo has cost the German taxpayer 142 billion Euro so far.” This writer can attest to the accuracy of the information, but attempts to contact the whistleblower himself have proven unsuccessful.
It is likely that additional bailouts of European Union members (read Portugal and Spain) teetering on the brink of insolvency will put an enormous strain on maintaining a conglomeration held together by little more than a common currency, especially when that currency is being battered by the necessity of large-scale bailouts. It will be further strained by people used to years of socialist profligacy being unprepared for the kind of austerity measures that must now be put in place as a requirement for those bailouts.
Yet one suspects that much of the tension could be defused if those running institutions deemed “too big to fail” were held directly accountable for what might be charitably referred to as a lack of foresight at best–or criminally negligent conduct at worst. Perhaps the appropriate accountability would be two-fold: for the bumblers, a multi-year ban from working in anything related to the banking, investment or securities business. For the criminally negligent, serious jail time and a total forfeiture of one’s assets.
The working ban on the former group is critical. Incompetence that can bring a nation to its knees can no longer be dismissed as an honest mistake with no consequences. Hundreds of millions of people will be paying a price for such incompetence for the foreseeable future, and such colossal mistakes, no matter how honestly they were made, must engender consequences.
Should the EU be saved? That is up to the people of Europe to decide. The idea of making warfare unthinkable is an admirable ambition. Whether that is a viable tradeoff for making individual countries financially vulnerable to their less responsible neighbors and extra-national financial institutions is anyone’s guess. A financial cancer which began in Greece is spreading, and a lot of Europeans are coming to the conclusion that the “cure” might be worse than the “disease.”
They may see “amputation” as the only viable alternative.
Arnold Ahlert is a contributing columnist to the conservative website JewishWorldReview.com
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