Today in the pressWednesday 06 March 2013 09.05
BANKERS WARNED THOUSANDS MORE MORTGAGES HAVE FALLEN INTO ARREARS - There has been another surge in the number of homeowners who are behind on their mortgage payments. The grim news on arrears was laid out by Central Bank officials to bankers, credit union officials and credit card company executives, writes the Irish Independent. Figures for the level of arrears for the last three months of last year are due out tomorrow and are set to show an additional 4,000 households are unable to meet home-loan repayments. It is expected the figures will show that more than 90,000 residential mortgage accounts are now three months or more behind on their repayments. This is up from 86,000 accounts last September. Head of banking supervision at the Central Bank, Fiona Muldoon, told bankers and other lenders at a specially-convened meeting that greater efforts would have to be made to tackle the arrears issue. It is understood she told bankers that there was deadlock at present as each bank was trying to protect its own borrowings and was reluctant to be the first to do deals with householders who have multiple loans, until all lenders agree a deal. The meeting was called to try and seek a way to divide up loan losses among lenders. At the meeting were AIB boss David Duffy, Ulster Bank's Jim Brown, Permanent TSB's Jeremy Masding and KBC Bank's John Reynolds, a senior Bank of Ireland official, along with head of the Irish League of Credit Unions, Kieran Brennan, and Kevin Johnson of the Credit Union Development Association. Irish Banking Federation boss Pat Farrell, representatives from credit card company MBNA and head of the new Insolvency Service, Lorcan O'Connor, were also at the meeting.
CENTRAL BANK MOVES ON IBRC COMPENSATION - The Central Bank intends to dip into a €388 million industry-funded deposit protection account (DPA) to meet the compensation payments due to eligible depositors of Irish Bank Resolution Corporation, which is being liquidated by the Government. The regulator wrote to credit institutions across the country on Monday to inform them of its move, reports the Irish Times. The payouts relate to the deposit guarantee scheme (DGS), which is designed to protect depositors in the event that a bank, building society or credit union authorised in Ireland fails. Deposits up to €100,000 per person are protected by the DGS, which is administered by the Central Bank. Banks, building societies and credit unions are obliged to maintain funds in the DPA equivalent to 0.2 per cent of their total deposits. The DPA is used by the Central Bank for any compensation payments due under the DGS.
FORBES, ALWALEED AND THE $9.6 BILLION QUESTION - The Forbes billionaires list, seemingly designed to stroke the egos of the world’s richest people, has pricked one of them in painful fashion, alleging that Prince Alwaleed bin Talal “systematically exaggerates” his wealth. Hours after the Saudi investor announced that he was “severing ties” with the benchmark of billionaires’ bragging rights, the magazine published a lengthy investigation into his net worth. The Financial Times says that Forbes’ estimate, up $2 billion in the last year to $20 billion, stands $9.6 billion below the prince’s own estimate. Almost all of the gap, it said, stems from a starkly lower assessment of his 95% stake in Kingdom Holding, which houses his investments in assets including Four Seasons hotels, Citigroup and News Corp. Noting steep jumps in the stock before publication of the last four Forbes lists, the magazine said Kingdom’s valuation “rises and falls based on factors that, coincidentally, seem more tied to the Forbes billionaires list than fundamentals”. The magazine added that no other billionaire lobbies as hard as the prince does to affect his or her ranking. Prince Alwaleed’s office reacted angrily to the “completely unsupported and biased allegation based on rumours that stock manipulation ‘is the national sport’ in Saudi Arabia”, describing it on Tuesday night as an insult to Saudi regulators.
CITY WATCHDOG KNEW BANKS WERE FIXING LIBOR FOR THREE YEARS - The City watchdog yesterday admitted that staff had been aware of Libor fixing for nearly three years before it finally launched an investigation into what has rapidly turned into banking's biggest scandal, says today's London Independent. Releasing the findings of an internal audit into its conduct, the Financial Services Authority said there were 26 separate occasions when the practice of banks deliberately "lowballing" their Libor submissions was raised with staff. The practice was indirectly referred to in a further 48 documents, emails or other communications. These "red flags" were raised with staff at "all levels" of the organisation. But the audit cleared the FSA of the type of systemic failure found in relation to its supervision of Northern Rock in the run-up to the mortgage bank's collapse. The report found that the FSA had not been aware of the more serious scandals of traders colluding to fix rates to benefit their trading positions before it launched its inquiry into Libor. None the less, the publication drew a rebuke from Andrew Tyrie, chairman of the Treasury Select Committee, who said it showed there was something "amiss" at the watchdog. He said it "confirms the Treasury Committee's concerns that the FSA was slow to act on evidence it received relating to Libor manipulation".