Morning business news - January 2Wednesday 02 January 2013 10.55
CREDIT UNION SECTOR IRELAND'S ''NATIONAL TREASURE'' - While much of the focus of the past few years has been on the banks, the problems besetting the credit union sector have slipped under the radar somewhat. Just before Christmas, the Government provided for the early enactment of the Credit Union Bill which cleared the way for a €250m taxpayer-funded bailout of the sector.
David Jackman, a senior consultant with Resources Global Professionals, who has worked with the sector, described the legislation as a 'crunch bill' for the credit unions. He said the Bill would provide for a new capital requirement to make them more robust as well as measures to make them more professional in terms of governance. "The credit union sector has weathered the past three years better than the banks. There has been a general fall off in loans that they've been providing, but there's not a clear cut trend," David Jackman said of the problems facing the credit unions. "Lessons have been learned and precautions need to be taken," he added. Mr Jackman said the difficulties were not uniform across the sector, but were patchy. "A lot of credit unions have very dynamic boards and took early steps to offset difficulties. Others are playing catch-up," he said.
David Jackman said the long term plan is for a reduction in the number of credit unions. "The idea is to produce unions strong enough to take their destiny into their own hands," he said. "The credit union sector is a national treasure which is worth looking after. The trick is to broaden the range of services without losing the trust and the community link. If that can be achieved, it would be a real success story for Ireland," he added.
MORNING BRIEFS - Activity in Ireland's manufacturing sector grew for a tenth consecutive month in December. The NCB PMI came in at 51.4 - above the key 50 level which signifies expansion. It was down from November's reading of 52.4 but still ahead of the European average. PMIs for Spain, Italy and the whole of Europe are due out later, as are German inflation figures.
*** Two reports on the property market are out today from myhome.ie and daft.ie. Both point to some level of stabilisation in the property market, particularly in Dublin city. The effects of the end of mortgage interest relief and the introduction of the property tax could sour that positive note in the coming year, however.
*** Stock markets in the Asia-Pacific region have kicked off the year the year with gains, as investors took some relief from the last-minute fiscal deal reached in Washington. Two of the main markets - Japan and China - are still on holidays, but elsewhere in the region, markets gained modestly during the morning, and climbed further as the compromise deal emerged that will stave off tax rises for the majority of Americans. The spending cuts, however, will have to be hammered out down the road and there is the looming battle over raising the US debt ceiling again.