Meanwhile, In Minister Noonan’s Imagination


Read the statement by the Minister for Finance, Michael Noonan, to the Dáil this afternoon on the March 31 Promissory Note here.

In short: He’s replaced the promissory note with a government bond (so it’s one IOU for another). This bond is given to Anglo, who take it to the Bank of Ireland. The BoI gives Anglo cash in return for the bond, thus paying off the promissory note payment. Meanwhile, the BoI swaps the IOU with the ECB in return for cash.Where Nama comes into it confuses us entirely.

THE challenge: Can anyone explain this transaction in less than 50 words?

Meanwhile, a welcome Irish Times typo:

Earlier: Anglo Boss Made €866,000 LAST YEAR

Thanks BlackMamba

18 thoughts on “Meanwhile, In Minister Noonan’s Imagination

  1. Dave, Dublin

    So the promissory note re-negotiation has failed then? What were the last few weeks of promises for?

    Noonan needs to find a new horse, his blind one has stopped listening to him altogether.

    1. Dave, Dublin

      Sorry, just read his statement. Looks like Bank of Ireland are expected to finance the bond (after the ECB finances them); but Noonan et al. couldn’t get that sorted in time, so NAMA is meant to provide short-term finance instead. I’m guessing BoI’s takeover from NAMA is assured, even if it has to go to their shareholders.

  2. stoneruile

    So let me get this straight. We pay for toxic (depreciating) assets that the banks need off their books. We are told that these will be sold off at a profit for the state at a later date (lol, i know). Now these assets are being used to pay off the loans that we originally had to take to buy the assets? Are these people for real? Are the Irish people for real? How can this be allowed to continue? (I know that sounds like the end of a TBC batman episode)

  3. James M. Chimney

    I seriously haven’t a clue what’s going on here. Can I get a job in government? Or am I overqualified?

  4. paul

    …and following the announcement Noonan walked out, the Ceann Comhairle refused requests from TDs to respond and instead we had some flute talking about Sheep Worrying in the Cooly Peninsula – I kid you not. That is the state of our parliament.


      I thought that was something other than what it is.

      Turns out it means sheep-dogs chasing the sheep when you don’t need them to.

  5. Phil

    Did he just replace a Promise to repay ONE debt repayment, with a sovereign bond? A bond they will require interest repayments ?

    Is that monetizing the debt, if so just say it1 enough of the spin!

    What about the other promissory notes?

    And are we going to have to listen to a troupe of FG heads telling us how wonderful they are….

    How about a debt write down ! that would have been a successful negotiation

  6. beardy man-child

    I am confused let me get this straight so….I think Noonan got confused then pooped in his pants and we are expected to wipe him down with some IOUs? Or is Nama calling round to my gaf to replace those cans it drank last night?

  7. Steo

    Challenge: We all pay (at least) twice more for debt that we’ve already paid once and most likely had absolutely nothing to do with incurring. (24)

  8. Jimbo

    Mother of Jesus, we are truly finished as a country. Noonan can spin it whatever way he wants but the fact is that nothing has changed as a result of the election. We are a nation of fools, or maybe that should read tools.

  9. Kramer

    I think this is a good thing but can’t explain why.

    To repay the promissory note we would need to borrow from the Trioka. Instead we are given Anglo a 1 year government IOU (bond), BOI buys the bond off Anglo (gives it cash). BOI then sells the bond back to the ECB for cash.
    End result – ECB gets government bond instead of cash?

    Is Nama giving BOI a short term loan?

  10. Marketeer

    If a tree falls in the woods, can Noonan still figure out a way to make it cost the Irish taxpayer?

  11. Cormac

    Here’s how it works.

    The Government lent Anglo money in the form of the Promissory Notes (PNs), which Anglo could then bring to the Central Bank of Ireland (NOT Bank of Ireland – they aren’t involved) as collateral for liquidity loans. The CBoI DID NOT borrow this money from the ECB, they created it. The CBoI created this liquidity with the approval of the ECB because it was an emergency.

    When the Government pay out on the PNs, Anglo uses this money to repay the CBoI. The CBoI then burns this money. Not literally, but it does get retired/taken out of circulation/ceases to exist. This money is not going to pay off European gamblers (Anglo has already paid them back “out of their own resources”) and is not going to pay back our masters in the ECB. No one would be hurt if we never paid out this money. Not even our own CBoI, because Central Banks can’t be insolvent.

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