Banking Reform

NAMA & the Banking Crisis

The need to prevent financial collapse has been used as a justification to prop up corrupt business dealings of property speculators and the financial community with the introduction of the blanket banking guarantee and the National Asset Management Agency (NAMA). We would stop the transfer of assets from banks to NAMA at above current market values and implement the structured wind down of non-systemic and non-performing banks. We would instigate a full public and transparent enquiry into the current crisis. We would introduce effective controls of credit and investment instruments and introduce restraints against any system of bonus payments to employees of financial institutions which encourage short term risky financial management. We would encourage the pursuance of legal action against those who have contributed, through financial mismanagement, to the current financial crisis. We would also support prosecutions against those property developers who fraudulently obtained loans or illegally disposed of assets, and those who helped or encouraged them in so doing.

Property developments seized by NAMA will be completed as ecologically friendly social or affordable housing or other health, educational, social and community projects and vertical, hydroponic farming wherever possible.

We would:

■ Demerge banks that are “too big to fail” to reduce the risks of systemic failure.

■ Segregate financial markets by separating activities such as trading and retail banking.

■ Gradually eliminate all “exotic” financial instruments.

■ Create secure, accessible and ethical local banking systems for people by growing the role of post offices and credit unions.

■ Enhance support for the local economy by expanding the range of smaller-scale “friendly” sources of finance.

■ Introduce complementary, multilevel currencies to provide credit in tune with the needs of regions, towns, cities and neighbourhoods, whilst helping to inoculate the economy from systemic financial shocks.

■ Create new public money, free of interest, to cope with unprecedented financial emergencies, and as the basis for loans to rebuild the infrastructure of productive local economies.

■ Encourage the introduction of time banking, LETS systems and other measures to enhance the core social economy.

■ Introduce / extend moratoria for housing crash victims, overhaul social housing and establish Community Land Trusts.

■ Increase stability and raise resources with currency and financial transaction taxes e.g. a Tobin Tax or a Robin Hood Tax.”

■ Create asset-backed finance for investment, including Limited Liability Partnerships

Fís Nua supports an immediate and structured debt-equity swap in relation to the debts of the banks of The Republic of Ireland owed to bondholders.

Bankruptcy & Debt Easing:
We would support the modernisation of bankruptcy legislation to enable people with overwhelming debts to obtain easier access to the protection of the courts. This would include the reduction of the bankruptcy period from the current 12-year period to six years and the introduction of individual voluntary arrangements as an alternative to bankruptcy.

Fís Nua supports all ‘innocent’ victims of the banking crisis i.e. those people who were encouraged by financial institutions to take on mortgages or debt that could easily become (and did in fact become) unsustainable. No one should become burdened with a life of debt or lose their homes because of the government and financial institutions fuelling of the property bubble.

Withdrawal from the Euro

Fís Nua supports the future withdrawal from the Euro as long as, in so doing, there would not be caused any further destabilisation of the economy. The government would first need to attempt to resolve issues around the banking crisis and repudiate the legacy debt created by the government adoption of private banking debt.  If negotiations fail to remove the banking debt from the government debt burden then there should be a referendum on the issue of withdrawal from the Euro and, if withdrawal is confirmed, then a national unit of currency should replace the Euro.

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