GOLDMAN PLAYS DUAL ROLE WITH QUINN GROUP - Investment bank Goldman Sachs is snapping up discounted Quinn Group debt on behalf of clients while simultaneously advising the Government on Anglo Irish Bank's Quinn dealings. The Irish Independent has learned that Goldman Sachs has been retained by the National Treasury Management Agency (Ntma) to run the rule over various plans submitted by Anglo. This role includes examining Anglo's proposal to buy embattled Quinn Insurance to improve the bank's chances of recouping a €2.7 billion debt owed by the wider Quinn Group and family, sources confirmed. Separately, Goldman Sachs traders have also been actively buying up Quinn Group bonds on behalf of its clients. It is understood that Goldman has taken a "small portion" of the €50m or so of Quinn debt that's been traded recently. This €50m is less than 4% of the €1.2 billion in Quinn Group bonds outstanding. The small level of debt that's been bought by Goldman means the bank's clients could not have a deciding say in the way the Quinn Group's debt is ultimately restructured.
BANKS FLEECE CONSUMERS WITH INTEREST RATES, CLAIMS WATCHDOG - Irish consumers are being "mercilessly fleeced" through paying higher interest rates in order to rebuild the balance sheets of the banks, according to the Financial Regulator's consumer panel. Householders who do not have tracker mortgages are being treated as "second-class citizens", forced to pick up a disproportionate share of bank rescue costs, says a report by the Government-appointed watchdog. It says the "unacceptable" pace of investigation into how the financial system in Ireland came close to collapse "leaves a lot to be desired", according to the Irish Times. It contrasts this with the US and Iceland, which have moved faster to examine what went wrong, and says in Ireland the commission to investigate the banking crisis, while welcome, should have been established sooner. "Furthermore, there has been very little outcome from ongoing investigations into dealings at some of our major institutions by the Garda, Office of Director of Corporate Enforcement or the Financial Regulator." The Consumer Consultative Panel report accepts the need for shortterm measures to restore financial stability but says consumers should not have to pay in the long term and "more robust consumer protection is required now more than ever".
ROBUST REGULATION CALL FOR CREDIT UNION SECTOR - Weak credit unions will be exposed in the recession and the sector needs a strong and robust regulatory framework for long term sustainability, the Registrar for Credit Unions James O'Brien said last night. Addressing the inaugural Credit Union Regulatory Forum in Cork, Mr O'Brien said: "The future sustainability of your credit union and the overall credit union sector depends on that trust. If credit unions are to remain sustainable in the long term, then it is vital that a strong and robust regulatory framework is established to ensure the protection of members' savings and the financial stability of individual credit unions and the sector overall." The Irish Examiner reports that Mr O'Brien said he expects the downturn will continue to expose credit unions that do not have the financial strength to weather difficulties. "Part of our regulatory work will be concentrating on identifying weak, or non-viable, credit unions and taking preemptive actions where necessary in order to sustain the financial strength and well being of the sector," he said.
BLOCKBUSTER TO FILE FOR BANKRUPTCH IN US - Blockbuster, the DVD rental chain with 5,800 stores around the world, is expected to file for bankruptcy, marking another convulsion from the shift to online entertainment, says the London Independent. The company has $900m (£575m) of debt that it cannot pay because its revenues are tumbling and it is sliding further into the red, and a financial restructuring deal will wipe out shareholders and all but the most senior bondholders. Blockbuster's fortunes have been sinking since the launch of rival services which allow users to order DVDs online and receive them through the post, such as Netflix in the US. The advent of online streaming of films, and video-on-demand cable services, plus movie downloads from stores such as iTunes, has dealt a further blow. Although Blockbuster has teamed up with Hollywood studios to launch services of its own in all these areas, it has been hobbled by the costs of its extensive store network, which spans 17 countries. In the first six months of 2010, revenues declined 16%, sending losses ballooning from $9.2m in the same period last year to $134m. For several months, the company has been operating only with the forbearance of its lenders.