Today in the press

Monday 29 April 2013 10.34
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

IRISH BANK REGULATOR SET TO JOIN LLOYDS - Ireland’s chief banking regulator is set to join Lloyds Banking Group as the new head of compliance at Britain’s biggest lender. Matthew Elderfield, who has overseen bank regulation at the Central Bank of Ireland since the end of 2010 and was a key figure in dealing with the country’s banking crisis, is set to be approved for the Lloyds role by UK regulators within coming days, writes today's Financial Times. Lloyds, which is set to announce first-quarter results tomorrow with a consensus forecast of about £900m pre-tax profit, is expected to confirm the appointment as soon as this week. The move echoes the recent decision by Barclays to appoint Hector Sants, the former chief executive of Britain’s Financial Services Authority, to a new global role heading compliance and regulatory affairs. HSBC has also created new high-level compliance and regulatory affairs posts. The appointments come after a string of scandals for Britain’s banks, with issues as diverse as Libor rate-rigging, Mexican money laundering and - particularly in Lloyds’ case - extensive mis-selling of PPI, exposing apparently endemic compliance failures. Mr Elderfield, an Englishman, was the first foreigner appointed to the post of financial regulator in Ireland and is credited with introducing tougher regulation, stiffer penalties and tackling cronyism in the country’s banking and business sectors. “I didn’t know the bank CEOs. I didn’t play golf with them. I just thought I’d call it as I saw it,” he told the Financial Times in an interview in January.

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NOONAN WARNED ABOUT DANGERS OF TRANSACTION TAX - The ultimate cost of the European Union's planned €35 billion financial transaction tax will be borne by ordinary citizens and taxpayers and its effects will harm small and medium-sized businesses, the International Banking Federation (IBFed) has warned Finance Minister Michael Noonan. The IBFed has written to Mr Noonan in his capacity as president of the EU's Ecofin council, spelling out what it believes are the dangers of the controversial financial transactions tax (FTT) that is due to come into force next year, says the Irish Independent. Although Ireland is not one of the 11 EU member states that is introducing the divisive FTT, it is responsible, as the holder of the EU presidency, for its implementation. Plans for an EU-wide FTT were ditched last year when it became clear that some countries had deep reservations about the proposals. There were concerns that the tax could result in financial firms leaving the International Financial Services Centre in Dublin or reducing their activities there. But the EU is enabling member states that do want to introduce the tax to do so under the so-called "enhanced co-operation" procedure. That allows a proposal to be adopted by a minimum of nine member states, even if other members don't plan to do so. The countries that have signed up to the FTT plan are Germany, France, Italy, Spain, Portugal, Slovenia, Estonia, Belgium, Greece, Austria and Slovakia.

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€45m HOLE IN CHURCH OF IRELAND PENSION FUND - In the eyes of their members, defined-benefit pension schemes are usually divine. But for the clergy of the Church of Ireland, faith in their retirement fund to provide is being tested by a €45 million deficit, reports the Irish Times. A report to members of the Church of Ireland General Synod, to be held in Armagh in May, recommends that the synod votes to close the clergy pensions fund and replace it with a defined-contribution scheme. Actuaries have estimated that the assets of the fund are sufficient to cover only three-quarters of the liabilities, after the interest rates paid on the bond investments by the fund were less than glorious. The report gives its blessing to the establishment of a defined-contribution scheme, which would mean each clergy member would see their retirement plan exposed to the whims of the omnipotent stock market. It implies this would not be as financially perilous as “the risks inherent in a defined-benefit fund, where such a fund could become actually insolvent, or technically insolvent”. Contribution to the new scheme will be by both the clergy member and the parish or diocese.

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CREDIT UNIONS LEND €1.1 BILLION AS NEW RESTRICTIONS IMPACT ON LOAN BOOK - Irish credit unions have lent €1.1 billion to their members in the last 12 months, delegates of the Irish League of Credit Unions (ILCU) heard over the weekend. New restrictions on lending have had a severe impact on the size of the credit union loan book, but membership of the movement continues to grow, says the Irish Examiner. There are 3.1 millio members across 32 counties making the Irish movement one of the most popular in Europe. The ILCU held its annual general meeting in the University of Limerick over the weekend which saw over 2,000 delegates from nearly 500 credit unions attend focus groups and discussions on the challenges facing the movement. Delegates are keenly aware that the credit union movement is facing serious restructuring as a result of the economic crisis. Recent regulatory and legislative changes, as well as restructuring within the sector, were key agenda items, as credit unions move to offer a broader range of services to satisfy the increasing needs of their growing membership. President of the ILCU Jimmy Johnstone said that the credit union wanted to be seen as more than just a provider of loans. “We are a volunteer-led, cooperative, not-for-profit movement and we have much to contribute. “Our bottom line is not about empire building or status symbols. Sure we provide financial services but we want to provide a lot more,'' he added.