The article really wants to imply that because this worked, we shouldn't be afraid of "too big to fail", but it doesn't dare say that and kinda of ends up sitting between two chairs.
"I'm not saying that banks crashing isn't bad, but it wasn't a problem for Ireland to have banks disappear"
but the thing is, according to the article, trust in banks never disappeared, neither did the banks. People kept writing cheques against their bank accounts. There was a clear expectation that banks would open with all money intact and cheques would be processed.
That is a very different scenario from a bank failing.
As an Irish person, I would not _particularly_ recommend Ireland in 1970 as a model to aspire to.
And even given that, the banks did not actually fail, they just weren’t operating, and the expectation was that they would start back up again at some point. When Ireland actually faced the banks failing, in 2008, we bailed them out and nationalised most of them, at a cost of almost 10,000 euro per capita.
Arguably the only reason it worked out fine (for some value of fine) in the 1970’s was because everything being a shitshow was the generally accepted state of affairs, and for a lot of normal working people being paid cash was still normal.
For 21 minutes and 53 seconds, I highly recommend this video. It gives so much context and describes the situation in as neutral of a tone as it's possible with a sprinkle of dry humor. Also, Patrick takes it a step further by answering the question if something like this could work again as well as discuss how this system that emerged compares to modern day cryptocurrency systems.
Flagging this article for being too stupid to warrant reading. In 1970, nobody was afraid their savings disappeared; when a bank fails, people would lose their savings unless the government insures or rescues the bank.
Given the extremely low quality of this article, and given that the author is a finance editor rather than some freelance contributor to Business Insider, I very much hope that HN readers would stop upvoting submissions from Business Insider in the future.
> [...] almost the entire banking system of Ireland went on strike after an industrial dispute in 1970. The strike lasted nearly six months, yet the economy escaped unscathed.
Getting people to strike isn't trivial, but this is the first time I learn about bankers striking.
The banking system in 1970 was much more labor-intensive. This was before ATMs and online banking, or even computers — a small local bank in Ireland probably didn't have an IBM mainframe at that time.
So there were clerks and cashiers at every level pushing paper, crunching numbers, handling cash. These people were clearly working class, not the later Wall Street image conjured by the word "banker".
A perfect example of my favourite part of any "class warfare" talk. Even for the "capital" class, the system isn't necessarily in their favour. It's only when you're at the absolute peak that you get the benefits. Everyone else is perfectly disposable, society just runs smoother when society believes that 6 figure salaries puts someone on the other side of the fence.
It’s uncommon in the US for reasons. It’s a thing in Europe.
1970 Ireland isn’t exactly an example of a modern or booming economy.
But… what happened there should give pause when financial bros get weepy and pat themselves on the back about their sacred duty to provide liquidity at all costs. (And take a vig)
Back in the 90s in Ireland, my mother would occasionally cash a cheque at the pub - if it's not crossed payee a/c only, the bearer can generally cash it themselves.
Going further back, pubs were the local shops for general dry goods, particularly in rural communities. I recall some dusty window displays in some pubs even in the 1980s, when I was a kid.
Recently I found that in a few of the more touristic areas in Ireland (which I rarely visit, being from here, was showing friends some places), a lot of pubs will offer a foreign exchange service of dubious legitimacy with debatably fair rates.
Same thing in the border counties up north - you can often spend or exchange Sterling and Euro currency, but the rates will suck.
In the 1990’s where I grew up, one of the two shops in the village was basically a room off one of the pubs. The other, larger shop was also the post office, hardware store, etc.
1970s Ireland was very homogenous, which is to say white. It wasn't until the 90s that immigration began flowing in the other direction to a meaningful degree. So while I agree with you, it was unlikely a problem at the time.
Although that doesn't cover gender or class discrimination so I suppose that was still an issue.
The link is extremely light on detail so in skeptical
1. What was the extent of the strike? Did salaries still get deposited? Did inter company transfer go through? Did exchanges stay open? Did lines of credit for businesses small and large stay open?
2. The whole "we knew who had money and we didn't deal with strangers" makes me suspect there's a whole other side of this particular story.
Lots of decisions in the last 50 years have made "the system" more fragile. This makes me realize that outsourcing trust is another one. This would never happen now because businesses have no connection to their customers, either a payment provider or credit bureau does the vouching which becomes meaningless when things don't operate as usual and human judgement is needed
wodenokoto|2 years ago
"I'm not saying that banks crashing isn't bad, but it wasn't a problem for Ireland to have banks disappear"
but the thing is, according to the article, trust in banks never disappeared, neither did the banks. People kept writing cheques against their bank accounts. There was a clear expectation that banks would open with all money intact and cheques would be processed.
That is a very different scenario from a bank failing.
harpiaharpyja|2 years ago
What the article describes is nothing of the sort. It was a strike, which is a breakdown of operations, not insolvency.
corethree|2 years ago
If someone owes you or I money and then suddenly they go on strike there will be a vicious reckoning.
rsynnott|2 years ago
And even given that, the banks did not actually fail, they just weren’t operating, and the expectation was that they would start back up again at some point. When Ireland actually faced the banks failing, in 2008, we bailed them out and nationalised most of them, at a cost of almost 10,000 euro per capita.
fullspectrumdev|2 years ago
throw0101a|2 years ago
* https://www.youtube.com/watch?v=mFIQWWt4UaA
* https://en.wikipedia.org/wiki/Irish_bank_strikes_(1966–1976)
yosefjaved1|2 years ago
_cs2017_|2 years ago
Given the extremely low quality of this article, and given that the author is a finance editor rather than some freelance contributor to Business Insider, I very much hope that HN readers would stop upvoting submissions from Business Insider in the future.
repelsteeltje|2 years ago
Getting people to strike isn't trivial, but this is the first time I learn about bankers striking.
pavlov|2 years ago
So there were clerks and cashiers at every level pushing paper, crunching numbers, handling cash. These people were clearly working class, not the later Wall Street image conjured by the word "banker".
digdugdirk|2 years ago
Spooky23|2 years ago
1970 Ireland isn’t exactly an example of a modern or booming economy.
But… what happened there should give pause when financial bros get weepy and pat themselves on the back about their sacred duty to provide liquidity at all costs. (And take a vig)
barrkel|2 years ago
Going further back, pubs were the local shops for general dry goods, particularly in rural communities. I recall some dusty window displays in some pubs even in the 1980s, when I was a kid.
fullspectrumdev|2 years ago
Same thing in the border counties up north - you can often spend or exchange Sterling and Euro currency, but the rates will suck.
In the 1990’s where I grew up, one of the two shops in the village was basically a room off one of the pubs. The other, larger shop was also the post office, hardware store, etc.
terminous|2 years ago
> ‘They are mostly strangers to us, and we just have to play it by ear in deciding whether to accept a cheque’, said an official.”
Sounds like a recipe for discrimination and inequality, which isn't mentioned in either article.
ehnto|2 years ago
Although that doesn't cover gender or class discrimination so I suppose that was still an issue.
tekla|2 years ago
version_five|2 years ago
NikolaNovak|2 years ago
1. What was the extent of the strike? Did salaries still get deposited? Did inter company transfer go through? Did exchanges stay open? Did lines of credit for businesses small and large stay open?
2. The whole "we knew who had money and we didn't deal with strangers" makes me suspect there's a whole other side of this particular story.
neilwilson|2 years ago
https://bankunderground.co.uk/2016/01/20/the-cheque-republic...
AlbertCory|2 years ago
Some world-class puns there.
version_five|2 years ago
Kalanos|2 years ago