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IMF’s ‘interesting’ data on financial access

Posted on by Sean Whelan


Ireland has 85.33 ATMs per 100,000 adults, new IMF figures show

The IMF has just released its latest Financial Access Survey, which looks at people’s access to banking services.  This year it includes data from some countries on mobile banking services such as telephone or internet banking.

Sadly there is no data from Ireland on this development, nor from Germany, but there is information on mobile banking use from places including Afghanistan and Zimbabwe.

The basic information collected includes such things as the number of commercial bank branches per 100,000 inhabitants, and per 1,000 square kilometres: ATM numbers for population and territory, and deposits and loans in commercial banks as a percentage of GDP.

It seems Ireland has 12 bank branches per 1,000 km squared, which translates into 22.97 branches per 100,000 people.  We have 44.59 ATMs per 1,000 square kilometres of territory, but this works out at 85.33 per 100,000 adults.

Deposits in the banks amount to 62.99% of GDP, but loans from the commercial banks equate to 111.99% of GDP.

All of which is mildly interesting, but on its own tells us not a lot. So let’s start comparing – beginning with some similar sized countries – Israel, Finland, New Zealand and Denmark.
I won’t bore you with all the data – not everything is comparable anyway, but the important things you need to know is that among this group, Finland is the worst place to run out of cash, as it only has 36.5 ATMs per 100,000 adults.  Israel is best – they have 123.7 New Zealand have 72.5 and Denmark has 56.6.

There is no clear pattern to the deposit and loan data in this group – Israel has deposits in commercial banks equivalent to 94.8% of GDP, with loans out worth 74.7%.  Finland has 35.5% of GDP in deposits and 54.35% of loans from Commercial banks.  Denmark has 59% in deposits and 49.2% in loans, but New Zealand has 92.5% in deposits and 146.64% in loans.

So the Nordics don’t borrow as much as us.  But wait – look at Sweden: 59.6% of GDP in deposits and 134.5% of GDP in loans.  And the Greeks? 31.5 branches and 60.31 ATM’s per 100,000 adults, with deposits of 80.44% of GDP and loans of 108.5%.

What about some very small states – Iceland (fairly well provided with ATMs) has deposits equivalent to 56.57% of GDP, but loans of 99.84%.  Luxembourg has deposits of 99% of GDP and loans of 91% of GDP. (Plenty of  bank branches too – 83.43 per 100,000 adults).

And what of the big boys?  The UK offers no data on banks branches or ATMs, but has deposits of 153.2% of GDP and loans out of 152% dead.  The USA (with 33.8 bank branches per 100,000 but no ATM data) has deposits in commercial banks of 58% and loans out of 43.77% of GDP.

Germany is another place with no data on ATMs, but has just 14.65 bank branches per 100,000 adults.  Those same German adults have deposits equivalent to 29.01% of GDP and loans from commercial banks of 22.84% of GDP.

Across the Rhine, the French have 38.7 branches per 100,000 adults, deposits equivalent of 36.26% of GDP and loans of 39.97% of GDP.  And they have a decent quantity of ATMs – 109.17 per 100,000 adults.

So what does this tell us about the world of banking access and our place in it? Eh…no idea.  There are probably zillions of local factors at play in the data that make simple comparisons unsound.  But it’s kind of interesting all the same.

Coillte needs to clean up unhealthy situation over CEO’s pay

Posted on by David Murphy


The salary of the boss of Coillte was reduced from a maximum of €312,000 to €191,000 for a new appointee in 2011

It is no secret that some of the chief executives of semi-state companies and their board were less than happy with the salary caps which were introduced by Public Expenditure Minister Brendan Howlin three years ago.

One of those was state forestry body Coillte whose former chairman said the restriction would inhibit it from attracting a sufficiently qualified CEO.

In 2011 Brendan Howlin reduced the salary of the boss of Coillte from a maximum of €312,000 to €191,000 for a new appointee.

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Why the Watch wasn’t most important news from Apple event

Posted on by Will Goodbody

Apple's CEO Tim Cook announcing details of Apple Pay

Apple’s CEO Tim Cook announcing Apple Pay

By Will Goodbody, Science & Technology Correspondent

So, the hype has evaporated – for a while at least. The rumour mill can slow down, for a few months anyway. Apple has unveiled its new and updated products at a special launch event in California.

We now know the details of the two new iPhones – the 6 and 6 Plus. We know they are bigger than their predecessors, have an updated curvy look, an A8 chip, improved camera technology and a few other bits and bobs. Inevitably, they will sell in their millions, making the company even more money to add to its $160bn stash.

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The direct and indirect tax debate

Posted on by Sean Whelan

The European Commission has tax policy in its sights

The Nevin Institute’s report has sparked another debate about the country’s taxation system for individuals

By Sean Whelan, Economics Correspondent


Since we posted this blog Micheal Collins of NERI has posted a response to some of the issued raised here and elsewhere (see the IrishEconomy.ie thread especially).  It’s worth including all of it here, especially as it is in the form of a Q&A, so it is user friendly.  As we said, it has certainly kicked off a good debate.  The new NERI Q& A is further down the page, after the original blog post.

The Nevin Economic Research Institute seems to have kicked over a hornets nest with its latest version of a working paper claiming that top and bottom income deciles pay about the same proportion of their income in tax.

The premise is that while income tax is very progressive in Ireland, indirect taxes such as VAT tend are regressive.  Continue reading

Why Amazon paid $970m for Twitch

Posted on by Will Goodbody


Amazon already offers gaming services through its Fire TV set-top box

Amazon already offers gaming services through its Fire TV set-top box

By Will Goodbody, Science & Technology Correspondent


The owners of Twitch must be feeling pretty smug this morning. Last night they sealed a deal which will see them sell their mere three year old streaming service for just shy of $1bn. But while the price tag may be surprising to many, the buyer is even more unexpected. Because until a few months ago Twitch was reportedly in talks with Google with a view to a prospective tie-up.

So why Amazon, and why $970m? Few outside the world of gaming will know much about Twitch. But if you are a gamer, you’ve probably spent countless hours of your life using it. Twitch is a  video service for games, allowing them to stream and upload their gaming activities as they play to potentially millions of viewers who can follow every explosion and carjacking in real-time. A non-gamer might ask why? The 55 million unique visitors to the site, who together viewed over 15 billion minutes of content, would clearly respond why not?

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Interest rates will rise – it is just a question of when

Posted on by David Murphy


Many households have managed to pay their mortgages due to the substantial cut in ECB rates.

Central bankers in the euro zone, UK and US frequently adjust interest rates in unison.

That is not due to a herd instinct, but when conditions in one region merit higher or lower rates similar circumstances are often occurring elsewhere.

It does not always happen that way.

However, when the Bank of England makes noises about increasing interest rates it is worth asking the question whether the euro zone far behind.

In Ireland, the emerging recovery has been partly helped by a policy of exceptionally low interest rates. Last June the European Central Bank continued to reduce rates cutting to an unprecedented 0.15%.

Lower borrowing costs have eased pressure on Irish households – many of which are snowed under with high levels of debt.

Borrowers with tracker mortgages have seen a substantial 4.1% drop since the crash began in 2008. Those with standard variable loans have not been so lucky. Of course lower rates also mean reduced returns for savers.

In the UK this week, board minutes from the Bank of England revealed two members of its monetary policy committee had voted to hike rates.

The bank’s Governor Mark Carney, an Irish passport holder, has said “rates will need to start to rise” from their record low of 0.5%.

Analysts think that is likely to happen next year. Members of the monetary policy committee will examine wages, employment and economic growth before deciding when to tighten rates.

While growth in Britain has been the strongest of any of the G8 countries so far this year, the picture in the euro zone is more lacklustre.  Growth in the currency bloc was zero between April and June.

As Ireland picks up the pieces after the crash, the economy here is expected to expand much more quickly, possibly by 2.5% this year – although that turn-around follows a dramatic plunge in economic output.)

Inflation in the euro zone is running at 0.4% – far below the level at which the European Central Bank is comfortable.

There are a number of other measures which show conditions in the currency bloc remain sluggish.  With anaemic growth and weak inflation there is little incentive for the ECB to hike rates for the time being.

But when the recovery happens across the euro zone and inflation creeps up, Frankfurt will tighten monetary policy.

Many Irish households, which have been hit with higher taxes and wage cuts, have managed to pay their mortgages due to the substantial reduction in ECB rates.

For many, higher rates may be difficult to handle because their disposable incomes have diminished significantly during the crash.

It is not scaremongering to say rates will rise at some point in the future.

The question for the Central Bank, the Government and the banks here is what they will do to ensure a new group of householders don’t slip into arrears.

It is clearly going to be some time before Frankfurt increases rates.

And it would be reassuring to know the Irish authorities had at least considered the issue while they have the luxury of time.

Lessons from the banking crisis quickly forgotten

Posted on by David Murphy



Portugal’s Banco Espirito Santo went bust with losses of €3.6 billion

They say history repeats itself for those who were not watching the first time.

One lesson from the Irish banking collapse was putting the burden on the tax payer while senior bondholders got all their money back was an unfair, dangerous and destabilising error.

Ireland fully repaid senior bondholders who had lent money to the banks. That cost so much it was one of the reasons why the country had to be bailed out by the EU and IMF.

The experience in Ireland prompted Europe reconsider how banks should be rescued and who should pay.

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Fermanagh fracking fight perhaps a taste of things to come

Posted on by Will Goodbody

The government here has asked the EPA to carry out a study into fracking

The government here has asked the EPA to carry out a study on fracking

By Will Goodbody, Science & Technology Correspondent


In Belcoo, County Fermanagh opponents of fracking must be collectively exhaling. Over the past few months they took on Goliath. And yesterday they won – for now at least.

For months protests had been building there against an application by energy company Tamboran Resources to drill a fracking exploratory bore hole. Fracking involves the cracking open of deeply buried shale rock using high pressure fluid, which in turn releases gas that is then brought to the surface.

Tamboran estimates there could be up to £20bn worth of gas in the area around the border between Fermanagh and Leitrim. The problem is, however, the only way to get the gas out is from the northern side of the border, because fracking licences are currently not being issued by the government here while an in-depth study is being carried out.

Tamboran wanted to explore how much gas is under the ground there, by drilling a 750m deep hole in a quarry near Belcoo. It wasn’t planning to carry out fracking – just do some tests.

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Three reasons to look to the stars

Posted on by Will Goodbody

A supermoon rises next to the ancient Greek temple of Poseidon at Cape Sounion, some 65 kilometers south of Athens.

A supermoon rises next to the ancient Greek temple of Poseidon at Cape Sounion, some 65 kilometers south of Athens

By Will Goodbody, Science & Technology Correspondent


It’s been an exciting week for star-gazers, with the remarkable rendez-vous between the European Space Agency’s Rosetta probe and comet 67P/Churyumov–Gerasimenko. For a man-made object to travel 6 billion kilometres unscathed around the solar system over a decade and still manage to catch and begin orbiting a 4 kilometre target moving at 55,000 kmp/h is extraordinary. And happily, the best is yet to come, as Rosetta prepares to monitor and send a lander down onto the comet’s surface – unlocking, it’s hoped, wonderful secrets about life.

But back on Earth, the space fest is set to continue this weekend. Because Sunday and the early days of next week could end up being a super celestial showcase. According to the Irish Astronomical Association (IAA), on August 10th Ireland will enjoy its best SuperMoon until 2018, followed two days later by the peak of the Perseid Meteor Shower and a great series of passes by the International Space Station.

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Big banks back on the rise

Posted on by David Murphy

The billions poured Anglo and Irish Nationwide will never be seen again

The billions poured Anglo and Irish Nationwide will never be seen again

By Business Editor David Murphy

The country’s three biggest banks, AIB, Bank of Ireland and Ulster Bank, released financial results this week. All three are making progress (thanks to bailouts from Irish and British taxpayers.)

There are some common themes across all three.

They are making profits, their margins are improving and the amount they are setting aside for bad loans is also declining.

That is good news for bank shareholders. The State owns 14% of Bank of Ireland and 99% of AIB.

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