Importantly, these commitments are not necessarily the product of an explicit contract, like a bond or a loan. In fact, in large part they take the form of implicit policy promises. The re-basing of economic activity thus has broader implications. Inevitably, it forces countries to reassess their social contracts.
With their due diligence complementing the tail-risk reduction envisaged from PCAR2011, it is not unreasonable to suppose that such investors will see sufficient franchise value in the continuing banks to convince them that attractive investment opportunities exist. I look forward to welcoming new owners of Ireland’s downsized and cleaned-up banks.