CENTRAL BANK PAID €53m IN LEGAL, ACCOUNTING FEES DURING CRISIS - The Central Bank of Ireland paid out almost €53 million in fees between 2008 and 2013 to seven legal and accounting firms for work related to the banking crisis, new figures reveal. This included around €20.5 million last year, most of which was related to work on the balance sheet assessments (BSA) conducted on AIB, Bank of Ireland and Permanent TSB. These tests were a pre-condition of Ireland’s exit from the EU-IMF bailout programme. The data shows that no tenders were used to hire firms for almost half of the fees paid out, writes the Irish Times. The figures emerge in a response by the Central Bank to parliamentary questions asked by Sinn Féin’s finance spokesman Pearse Doherty. It shows that Big Four accounting group EY, the auditor to Anglo Irish Bank before its collapse, was the biggest earner, with fees of between €16 million and €16.5 million. The Central Bank’s data shows that EY received €10 million to €10.5 million last year, having been involved in the BSA tests on state-owned AIB and Permanent TSB. It earned up to €500,000 each year between 2008 and 2010 and between €2 million and €2.5 million a year in 2011 and 2012. The next highest earner was KPMG, which was paid between €13.5 and €14 million by the regulator since 2008. This included between €6.5 million and €7 million for BSA work on Bank of Ireland last year.
IRISH FIRM WON'T MISS A SITTER IN FINAL AT MARACANA - Ireland's role at the World Cup final next month is guaranteed - because the seats in Rio's Maracana stadium were made by an Irish company, says the Irish Independent. The 15 staff at Mergon in Castlepollard, Co Westmeath, crafted 54,000 of the redeveloped stadium's 79,000 seats, with the remainder made in the company's Czech Republic plant. Vice-president of business development at Mergon, Caolan Bushell joked: "We had a GAA team making a soccer stadium." Mr Bushell is excited about the prospect of seeing the company's product on the world's biggest stage. "Most of what we make goes inside of other products like cars and medical devices, so it will be great to see 79,000 Brazilians jumping up and down on a product that we can see, and say: 'we made that in Castlepollard'." He is hopeful that this opportunity will help to increase the company's chances of being involved in the manufacturing of seats for more stadiums.
EIRCOM WEIGHS UP IPO MOVE - Eircom has said that no decision has been taken regarding its future ownership, despite reports suggesting it is planning to raise €1 billion via a stock market flotation in September, says today's Irish Examiner. A spokesperson for the company said yesterday that the strategic options review which began in April, with Goldman Sachs and Morgan Stanley acting as joint advisers, remains ongoing; but did concede that an IPO is “definitely” being considered. However, the company is understood to be still open-minded regarding other options aimed at bolstering its financial strength, as well, including a trade sale or attracting additional investment. The former State-controlled telecommunications company has already had seven different owners (including the State and the public) and has been publicly owned on two occasions. Just over a month ago it said that the appointment of joint advisers (Goodbody Stockbrokers and Davy have been taken on as domestic advisers) shouldn’t be judged as a signal that a decision is imminent, or that the review was accelerating towards a conclusion. However, reports over the weekend suggested plans for a third Eircom float are being finalised, with the company hoping to raise around €1 billion from the dual Dublin and London share listing, with most of the proceeds going towards paying off its €2.3 billion debt.
CENTRAL BANKS TO CUT DEBT HOLDINGS Central banks are planning to cut their exposure to longer-term debt to protect themselves from losses when the Federal Reserve ends its bond-buying this autumn, increasing the risk of instability in global markets. The majority of respondents in a survey of reserve managers who control assets worth $6.7 trillion, or more than half of central banks’ total reserves, said they were likely to adjust their portfolios in preparation of tighter monetary policy, says the Financial Times. As the UK and US embark down the path back to more normal interest rates, big changes in asset holdings by other central banks around the world would heighten the risks of market disruption. The survey of 69 central bank reserve managers, polled in May by Central Banking Publications and HSBC, suggested many have already started to move into riskier assets, such as equities. That trend looks set to continue, with just under half of those polled saying they could envisage buying shares or exchange traded funds. Others said they would cut the duration of their bond portfolios. As the global economy shows some signs of returning to health, the Fed and other advanced economy central banks, such as the Bank of England, have started to consider tightening monetary policy. The prospect of higher interest rates have raised fears that a 30-year bond market rally is drawing to a close and that prices will fall in the years ahead.