We had the pleasure of speaking with Marc Rubinstein, author of Net Interest, a financial sector newsletter, about his essay, When Irish Eyes Are Smiling.

Marc writes:

Chinese Premier Zhou Enlai had a famous take on the French Revolution. When asked about its influence, his response was, it’s “too early to say”.1 The same might be true of the global financial crisis. One of the best books written about it is Crashed by Adam Tooze, published a full ten years after the event. But even that book doesn’t tell you how the story ends.

Right now, in Ireland, a fresh chapter is being written. In the past couple of weeks, not one but two banks have announced they’re exiting the market. First Ulster Bank, owned by the UK’s NatWest Group and then KBC, owned by the Belgian group, have said they’re out. Once home to a thriving banking market, Ireland is rapidly converging on a duopoly.

If you’re familiar with the idea of the capital cycle – as outlined in the book Capital Returns – it’s an interesting set-up. Capital cycle analysis focuses on supply rather than demand dynamics in an industry. Instead of trying to project how many long-haul flights will be taken globally in 2022, it looks at changing supply conditions. So in banking, when capital in the industry contracts around just two players, that’s something worth paying attention to.

Today, we take a closer look at what’s going on in Ireland. It’s a small market, sure, but it’s a great case study in boom-bust and what happens next.

Read on or listen to our conversation (recorded on April 26, 2021):

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About This Audio Series:

MOI Global is delighted to engage in illuminating conversations on the financial sector with Marc Rubinstein, whose Net Interest newsletter we have found to be truly exceptional. Our goal is to bring you Marc’s insights into financial services businesses and trends on a regular basis, with Marc’s weekly essays serving as inspiration for our discussions.

About Marc Rubinstein:

Marc is a fellow MOI Global member, managing partner of Fordington Advisors, and author of Net Interest. He is a former analyst and hedge fund manager, most recently at Lansdowne Partners, with more than 25 years of experience in the financial sector. Marc is based in London.

About Net Interest:

Net Interest, authored by Marc Rubinstein, is a newsletter of insight and analysis from the world of finance. Enjoyed by the most senior executives and smartest investors in the industry, it casts light on this important sector in an easy-to-read style. Each post explores a theme trending in the sector. Between fintech, economics and investment cycles—there’s always something to talk about!

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