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Will Moville keep its AIB

Posted Tuesday, April 12, 2011

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AIB

AIB has just announced that they will lose 2,000 jobs.

They hope that any redundancies will be voluntary but have not ruled out that some may not be.

With this announcement the AIB will be half its size at its peak circa 2007.

Moville

One hopes that they don't decide to close the AIB in Moville.

Bank staff get a few comments form people when they are out and about but they are as big a victim of the banks as we are - if not bigger.

Change of Power

AIB, like the other banks, took a lot of power out of the hands of the local bank manager and his or her staff and handed it to their teams of clever young graduates and fancy computer systems at headquarters.

In the old days the local bank manager would make the decision about major loans.

He or she knew the local people and knew who would be a good person to give a loan to and who wouldn't - and how much those given money would be good for.

However, that was taken from him and the decisions on loans pushed to headquarters.

Now all he could do was ask people to fill out a form, the details of which were sent to the bright young team at headquarters and they took the decisions from afar.

Extension

I remember in 2008 that I asked for an extension to my card or overdaft facilities (I can't remember which) and the local bank manager seemed very positive about it.

Therefore I was very surprised to find a few days later that I had been turned down by headquarters by people who didn't even know me.

Incentives

Then, haven given these bright young people the power to decide who got a mortgage or a loan the banks then incentivised them.

The more money the bank made from the loans the bright young things made the bigger the bonuses the young things got.

So what did they do?

They loaned out money for mortgages to any Tom, Dick or Harry who came along.

They used not just the bank deposits for this but borrowed money from German and other foreign banks in order to loan out more and make bigger bonuses.

They got their bonuses annually and so they thought of no longer term than the end of the current year.

Superbonuses

What if the whole thing collapsed?

They wouldn't lose anything by that as they had got their superbonuses previously.

Any bank manager in any local town knows that there are some people you just wouldn't loan money to.

However, the bright young things at headquarters didn't know the people at the local level and so loaned indiscriminately to anybody.

Casino

Not only that they gave them 100% mortgages, then 110% mortgages and then 120% mortgages to anyone who would take one.

It was a real casino and they were making a mint in bonuses.

The only problem would be if the economy started to go down, unemployment up and house prices started to fall.

As anyone who has been alive for more than a few years knows there is a cycle of these things.

Armageddon

Armageddon was sure to come.

And come it did.

Now people at local branch level will be expected to bear the brunt of it, perhaps with their jobs, for decisions that they had no part in - and if they had they would certainly have made a better job of it.