Today in the press

Wednesday 09 April 2014 11.02
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

THERE'S NO HOUSING BUBBLE - NOONAN WANTS HOUSE PRICES TO RISE - Finance Minister Michael Noonan wants house prices to rise further and claims fears of another property bubble in Dublin are exaggerated. Speaking at the 'Sunday Independent Business Evening ' last night, Mr Noonan also said the Government will use the state property agency NAMA to tackle the housing shortage. "We need to get property prices up another bit," he told the Dublin event. While dismissing talk of another boom, the minister conceded he was "worried" about Dublin's shortage of housing . Mr Noonan revealed NAMA would join forces with developers to build more than 22,000 homes over the next five years, says the Irish Independent. "I'm worried about the lack of availability of family homes in the greater Dublin area in particular," Mr Noonan said. "I'm going to use NAMA as a development agency to drive that." Despite rising house prices in Dublin, Mr Noonan said prices were still down 47% from their peak. "Claims that you've seen since Christmas that we're at the start of another boom, they're widely exaggerated," he said.
 
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CREDIT UNION BODIES IN DISPUTE OVER SUPPOSED AGREEMENT BY CENTRAL BANK - The Irish Times says that differences have emerged between the Irish League of Credit Unions (ILCU) and the Credit Union Development Association (Cuda), the two rival credit union lobby bodies, over a supposed agreement by the Central Bank to directly involve the league in regulatory oversight of its members. ILCU and its member, Maynooth Credit Union, yesterday dropped a lawsuit against the regulator, partly because ILCU said it had secured, from the Central Bank, a “unique” consultative role whenever there are talks between the bank and ILCU credit unions over issues such as financial stability. Kieron Brennan, chief executive of ILCU, which represents the bulk of the country’s 400 credit unions, claimed its new status was outlined yesterday in a letter from the Central Bank specifying its role, which he described as a “big step forward”. However, Cuda, which represents some larger credit unions, said it received the same letter yesterday from the Central Bank and it understands that nothing has changed. “We were in discussion with the [bank] and they have confirmed that there have been no changes to existing working and representative relationships between the Central Bank and the credit union representative bodies,” Cuda said. The letter sent to ILCU and Cuda yesterday sets out principles of consultation with the credit union lobby groups. ILCU said it represents a “Unique . . . new way of working” because the regulator will now consult with it over the affairs of individual unions.

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BIGGEST US BANKS FORCED TO HOLD $68 BILLION IN EXTRA CAPITAL - US regulators have held out the prospect of more draconian measures after ratcheting up capital requirements for the biggest US banks - from JPMorgan Chase to Goldman Sachs - forcing them to hold at least $68 billion in additional capital. A new “leverage ratio” will force the eight largest US banks to hold a minimum of 5% equity to total assets to absorb losses in a crisis and proposes adopting a more stringent way of calculating the rule. The leverage ratio is supposed to be a backstop to other capital rules that are “risk-weighted”, says the Financial Times. It does not allow banks to use their own models, which some critics have warned allows institutions to game the system. It is tougher than a new international metric that requires banks to reach a 3% minimum of equity to assets and potentially hinders the profitability of the eight banks affected - Bank of America, Bank of New York Mellon, Citigroup, Goldman, JPMorgan, Morgan Stanley, State Street and Wells Fargo - compared with their rivals in Europe. Dan Tarullo, the Fed governor in charge of regulation, indicated that he wanted to go further. He signalled that the Fed might impose an additional risk-based capital charge on the biggest US banks, bringing it “to a higher level than the minimum agreed to internationally” to discourage short-term wholesale funding.

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DISCOUNT WARS BRING SHARPEST FALL IN PRICES FOR SEVEN YEARS - Heavy discounting on clothing, shoes and electrical goods by duelling retailers helped trigger the fastest fall in prices in Britain's shops in more than seven years last month, says today's Guardian. Shop prices overall were 1.7% lower in March than a year earlier, driven down by falls in most non-food categories, but most notably a 12.8% drop in the cost of clothing and footwear and a 4.4% fall in the price of electrical goods. Food inflation also slowed significantly, to 0.8%. It was the fastest shop-price deflation since the British Retail Consortium/Nielsen index began in December 2006. Helen Dickinson, the BRC's director-general, said the deflation rate reflected retailers' efforts to attract customers who were carefully managing their budgets. "It's strong industry-wide competition as retailers vie for a share of limited spending capacity that is driving this record-breaking run. Retailers have been responding to their customers with keen prices and promotions to maintain market share," she said. Prices have fallen in all categories of clothing and footwear for seven successive months, with children's clothing and women's clothing the fastest fallers in March. Non-food deflation of 3.2% was the sharpest on record, while last month's food inflation number was also an all-time low for the series.

Keywords: presswatch