Covered bonds are what you sell when you can't sell orindary bonds at a price you can afford. Because they stay on teh banks balance sheet they are condsidered even safer than other bonds as the assets that cover their repayment are ring fenced.

It doesn't mean Leeds are in trouble. Just that there is a general shortage of inter bank lending.

That's my take on it.

Called "Bank to focus its lending support on the firms most starved of credit.

Within this article they mention Leeds Building Society (LBS). Whose raised £250m in capital using 10yr Cover Bonds at 4.87 interest. They go on to say conventional bonds are 0.5-0.7 percentage points more expensive.This would allow LBS to lift their gross new lending by £1.25bn. It goes on to say unlike traditional asset backed securities, cover bonds remain on the balance sheet.

So would the more knowledgeable on such things think this is a good way to raise capital and a sign they are learning lessons from the crash.

But how did Ireland corner this market? Was it all a part of the grand scheme? The history of Irish Corporation tax needs investigating.

And final point won't one of the other strapped for cash EEC members jump in to the low corporation game game if Ireland is forced out of this racket? Like say Latvia? Or are they all too scared now of Germany? This is beginning to get a bit historical…first time tragedy second time …financial

That's been my question this last week too. I have been reading and digging. I may get to talk to someone today who can start to point me to the inside answers.

I already talked to some of the Irish based asset managers. I could hear the sweat coming off them. "Where did I get their number? Where did I get this information? Who are you? Go away! Give us your number and we'll get someone from our headquaters to phone you."

They were clueless and frightened.

My guess at the moment is that this link is VERY important to what is going on right now.

It is CERTAINLY part of why the Irish government is resisting an EU bail out. The key is that the Germans have made it clear one of the conditions they want enforced is a raising of Ireland's corporate tax rate.

Ireland's low coporate tax is a MAJOR reason why Ireland has attracted all the SIV work. If they are forced to raise the rate, then the work will go to – guess where – go on. Did you say Germany? Give yourself a pat on the back. Of course it won't all go there but it will be up for grabs. The UK would get more.

We can argue about whether the Irish should raise the rate. But I can understand why they would be bitter at being forced into it by a competitor who is keen to steal the work away.

I'll be posting on this mess again as soon as I can.

nice.

The killer Ireland link too

"The way a CDO works is that first a special company is created to house it. That company is called a Special Investment Vehicle (SIV) or Special Purpose Vehicle (SPV). They are companies in name only. They are very often registered in the Cayman Islands and housed in Ireland."

Does that have massive significance to whats happening right now?

But Shanghai and Hong Kong banking has some interesting ties. Without making any unwarrented accusations or imputing any wrong doing by said bank, I suggest you consider where the Burma junta might bank and remember where the Golden Triangle is, what gets exported from there and where that money migtht get banked.

Banks need cash. They love cash cutomers. And some businesses are a very good and reliable source of cash even, perhaps especially, in hard times.

Are they safe. Realitvely speaking, for all the reasons of cash availability mentioned above, they are a pretty safe bet. Not completely but relatively.

If you want a safe and honest bank I would say move to the Cooperative Bank.

JamieG that's my type of revolution.

In other news, I didn't think I could love this man more than I did (Sky adverts notwithstanding):

http://www.youtube.com/watch?v=-Uop5R7E314