Back in September rumours spread in Ireland that one of the country’s biggest banks was close to going bust. Total nonsense, the experts said. Everything was A-OK. But the rumours persisted. On one radio talk show a caller pointed out that savings in the Post Office Bank were state-guaranteed in their entirety. Within hours millions of euros moved house from the banks to the post office. Next day the minister carpeted the (state) radio talk show for airing the ill-informed opinions of Joe Six-Pack without adding the sufficient balance of soothing expert voices telling us not to worry, to leave our money in the banks, which were totally safe. Three days or so later the government announced that all bank deposits were to be guaranteed by the ever-generous tax payer. It then became permissible to say that – yes, in fact – one of the big five or six banks was in serious trouble and action had to be taken to shore up the country’s financial system. Bank of Ireland shares are now trading at around one euro. In January 2008 they cost about ten. Anglo-Irish Bank shares are also at around a euro now, down from the region of 10 euros at the start of the year.
This, essentially, is why I am so worried by all the experts in Poland saying everything is fine and there is no cause for alarm. That’s what they said in Ireland, right up until the last lying minute. I suspect that Poland too will suddenly announce that although the banks are sound they are going to bail them all out – just in case. In fact, it might be happening already. Last Wednesday was set to be a disastrous day’s trading on the Warsaw stock exchange until at the very end of the day an international stock broking house suddenly started spending millions on Polish shares, driving the index up sharply in the last minutes of the day (an enquiry is supposedly underway). Perhaps someone got wind of a government plan to support financial institutions in Poland?
Tags: witold gadomski