Today in the press

Wednesday 20 February 2013 10.53
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

MARTIN WARNS OF CREDIT UNION LOSSES - Credit union savers could be burned to the tune of €17m over the liquidation of Anglo Irish Bank, Fianna Fáil leader Micheál Martin has warned reports the Irish Examiner. Taoiseach Enda Kenny was accused of lacking a grip on the situation, as Mr Martin said people in credit unions would be the only depositors in Europe to lose out due to the financial crisis. Mr Martin questioned why credit union assets were put in danger when the Taoiseach claimed that the emergency legislation deployed to liquidate the renamed Anglo, IBRC, had been in preparation since last November. “A number of credit unions had fixed-term deposits with IBRC, which were due to be repaid in September of this year. As a result of the decision to liquidate the IBRC, many credit unions will suffer huge losses. Sources within the credit union movement say the losses could be as high as €17m for credit unions across the county. It would be an incredible situation if that were the case,'' he said.''Why did the Government not consider making special provision for credit unions when preparing to take the decision? The losses involved will at a minimum wipe out any shareholder dividends credit union members could have anticipated in 2013 and 2014, and worse, unfortunately, may have an impact on the stability of some of the credit unions concerned,'' Mr Martin said. Mr Kenny said the situation would be looked into, but liquidations needed to be sudden.

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MORTGAGE INTEREST RATE COULD AFFECT UP TO 300,000 - Hundreds of thousands of homeowners are facing more mortgage pain as interest rates are hiked, says the Irish Independent. AIB, the country's largest bank, is planning a new increase in variable rates, its chief executive has warned. The move is expected to spark a new round of rises from other lenders, hitting around 300,000 people with variable home loans. AIB has around 70,000 customers who have variable rates. Every 0.25% rise in rates adds €30 a month to the cost of repayments on every €200,000 borrowed. Experts said a new rise in rates would push up the number of residential customers who are in arrears. Broker Michael Dowling of Abacus Finance in Dublin said all the lenders were ready to push up variable rates, but each lender was reluctant to be the first to move. Once one goes, others will follow, he warned. He said banks were anxious to see the average variable rate go from around 4.3% to 5%. That could add €1,000 a year to the annual repayments on a €200,000 mortgage.

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NAMA LAWYERS CRITICAL OF ATTEMPT BY DUNNE AND KILLILEA TO DISMISS LAWSUIT - US lawyers for the National Asset Management Agency have claimed a challenge by former property tycoon Seán Dunne and his wife Gayle Killilea to dismiss its lawsuit was an attempt to make a “complex web” of fraudulent transactions look “very innocuous and mundane”. The couple are seeking to have the State agency’s lawsuit against them in the Superior Court of Connecticut thrown out, arguing that NAMA has no jurisdiction to take an action in the US court to overturn the transfer of a half-share in an apartment in Geneva, Switzerland from Mr Dunne to his wife. The Irish Times says that in the third court appearance in an increasingly bitter dispute, Judge Barbara Brazzel-Massaro directed that NAMA chief executive Brendan McDonagh swear a statement and be questioned by lawyers acting for the couple at a private deposition. Sitting in the superior court in Stamford, the judge left it up to both sides to decide a date for Mr McDonagh’s deposition. She directed that another NAMA manager, John Coleman, be questioned by the couple’s lawyers under oath at an eight-hour sitting next month. One of the agency’s top 50 debtors, Mr Dunne, who personally owes NAMA €185 million, and his wife, who now live in nearby Greenwich, Connecticut, are seeking information from Mr McDonagh about the agency’s view of Mr Dunne’s business plan and its decision to take enforcement action against him.

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EU BANKS FACE STRICT TRANSPARENCY RULES - European banks are facing the threat of having to reveal their taxes and profits on a country-by-country basis in the latest twist to the EU negotiations over rules to make banks safer, writes the Financial Times. The European parliament is pressing for the tougher disclosure regime along with a demand for strict curbs on bankers’ bonuses as part of the law implementing the Basel III international accord. While the demanding transparency requirements have the full support of the European Commission, EU member states are largely resisting the initiative, introduced into the overhaul of bank capital rules. Under the proposal, Barclays, for instance, would be required to publish its profits and taxes in every national jurisdiction - from the UK to Zimbabwe. Banks are worried that the requirements - which would upend their bookkeeping practices and leave them vulnerable to public pressure over taxes - could be passed in the final haggling over the law. EU member states and the parliament had been cautiously optimistic of a reaching a deal on the law on Tuesday, after more than 30 negotiating sessions. However, talks broke down over issues including bonuses and the disclosure regime. Fresh talks are scheduled for next week.

Keywords: presswatch