BROAD WELCOME FOR ELDERFIELD'S STANCE - Matthew Elderfield - the head of financial regulation at the Central Bank and Financial Services Authority of Ireland - appeared before the Joint Committee on Economic Regulatory Affairs yesterday. He slated the former regulatory regime, told the Quinn Group to show him the money and made no bones about the fact that he needs more staff. He was welcomed by one deputy, Sean Sherlock, as the new 'Sheriff of Dodge City'.
Peter Oakes from Compliance Ireland says that while everyone was very impressed with the new regulator, yesterday's Committee meeting was a little depressing because about 50% of what Matthew Elderfield said had been said by his predecessors. The difference now, however, is that we seem to have a man who actually means what he says and will follow up on his statements, Mr Oakes added. He says those working in the compliance and risk areas of banks and other institutions will take a lot of heart from Mr Elderfield's comments.
Mr Oakes says that the financial regulator did not shy away from the fact that the tough new requirements for capital on banks in Ireland is going to result in consumers paying higher mortgage interest rates. He says the question really is now whether any of the banks who have ECB tracker rates will try and look at the fine print of the mortgage contracts which might allow them some 'wriggle room'. He says banks' lawyers are looking at these contracts to see if they can get out of some of these mortgages, or indeed charge more above the ECB rate.
The financial regulator has been given a five-year term and Mr Oakes says that a 'good man' would sort out the mess in ten years - an exceptional one would do it in far less. He says a lot of the process will come down to the staff and the resources Mr Elderfield has. He says the regulator is building up a top level of deputies to assist him with his task, and he should complete it within his five year term.
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MORNING BRIEFS - The US Federal Reserve has painted a picture of a country slowly coming out of recession, but still struggling with unemployment. According to the latest Beige Book report, US labour markets generally remain weak, but some hiring activity is evident, particularly for temporary staff.
*** On the currency markets, the euro is trading at $1.3635 cents and 87.8 pence sterling.
