Yes, I see what you are getting at, but I don't feel competent to answer it! One could, perhaps, point out that the situation is somewhat the same in Germany with the Landesbanken. The only difference is, germany can probably cover the Landesbanken, whereas the Irish state can't cover the Irish banks. Therefore, X', Y' and Z' in Ireland would head into negative territory if X, Y and Z went tits up. That, as far as I can see, either implies more funding from the EU -- either directly to X or indirectly to X', or a reduction in Z and Z' via the simple expediency of either default or devaluation (or both).
Er, so I guess my answer is that the implication is that money can go into Ireland either via X or X' or Z or Z', or any combination thereof, and it won't make much difference to the end result. To this extent, the statement that "Ireland" is putting some money in to rescue itself from the crisis is a bit of an accounting fiction. What it really means is that the Irish people will have to consume less, rather than the investors in the banks that have ownership of senior Irish bank debt.
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Re: Synchronicity
Date: 2010-12-05 11:20 pm (UTC)Er, so I guess my answer is that the implication is that money can go into Ireland either via X or X' or Z or Z', or any combination thereof, and it won't make much difference to the end result. To this extent, the statement that "Ireland" is putting some money in to rescue itself from the crisis is a bit of an accounting fiction. What it really means is that the Irish people will have to consume less, rather than the investors in the banks that have ownership of senior Irish bank debt.
PJ
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