Irish banks which were virtually the first recipients of State support are now pretty much at their lowest levels. They are even under the prices that triggered the intervention in the first place. With no shorting of financial shares via , CFDs or otherwise, allowed in the stock this represents continued liquidation of holdings. Market Makers do not, yet, appear ready to be supporters at any level and the fear must be that the State will indeed need to make good on its promise to guarantee every deposit within the system.

The rating agencies have been quick (for once) to look at the actual impact this will have on the actual credit worthiness of the Republic. This might actually be quite a serious development as the ROI is in the European Union and is therefore technically unable to just borrow unlimited sums.

It is a worry that this same scenario might play out across the UK banking prices as well. The government is standing as guarantor of the various rights issues going through but this does not seem to be tempting buyers in any significant size. Too many have lost out in the original issues back in February through May.

As Simon Denham of recently said, ?When the chips are down, the nations with the cash reserves should, in the end, come out on top. This means that Germany, Japan and China are likely to be the long term winners out of all this chaos. However even they will probably suffer in the short term as demand in the ?consumer nations? slows somewhat?.

With the various Government agencies now intent on clamping down on Financial services the UK may well be the really big loser in all of this. If State control and FSA over regulation drives business off our shores there are many places across the globe that will welcome it in with open arms. Restrictions on bonuses sound very good in newspaper column inches and give politicians populist appeal but in the end will only serve to drive markets further East. The City employs some 400,000 people but contributes around 9% of the GDP (depending on how you calculate the overall impact through the economy). The State cannot afford to lose this level of revenue otherwise taxes will have to rise to pay for all the things we now take for granted.

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