PACE OF FINANCIAL REGULATION STEPPED UP - It has been a big week for regulation as governments and their agencies get more involved with the business of financial institutions. Yesterday EU leaders agreed to publish stress tests of banks next month to show investors where any potential risks lie. Meanwhile, in Britain the Chancellor gave the Governor of the Bank of England sweeping new macro-economic powers, on top of the monetary policy he is already responsible for.
A conference called 'Regulation in the Age of Crisis' was opened by Minister Conor Lenihan in UCD last night. Over the next few days it will look at the nature of regulation, its failure, some successes, and its history, law and economics. One of the speakers is Jonathan Koppell, an Associate Professor of Politics and Management at the Yale School of Management.
Mr Koppell says that there is a temptation to say that history has shown that whenever a government gets involved in a business it proves to be a disaster. But he points out there is quite a lot of success stories in the US which are a mixture of public and private enterprises. He says that despite the current status of US mortgage giants Fannie Mae and Freddie Mac, they were very successful in recent years and their model has been replicated all over the world. He says that instead of government officials saying they are just interested in a company's commercial interests as a temporary shareholder, it would be better to acknowledge the reality so as everyone knows what their ultimate goal is.
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MORNING BRIEFS - After yesterday's European summit, which was dominated by the debt burden weighing on many EU member states, leaders agreed to publish stress tests of banks next month to show investors where any potential risks lie. EU Commission President Jose Manuel Barroso said the results would be published on a bank by bank basis. Leaders want to prevent the effect of the Greek budget crisis spreading. The summit came amid particular concern about public finances in Spain, the fifth biggest euro zone economy.
*** Halifax, the retail arm of Bank of Scotland Ireland, is closing about half of its 44 branches in the Republic this evening. The rest will close next Wednesday as the bank plans to focus on corporate and commercial banking. It is also closing its Bank of Scotland (Ireland) Asset Finance and Homeloans divisions to new business. Those with existing mortgages can stay put and Halifax has not said how many customers have not yet closed their accounts - it had 50,000 credit card and 50,000 current account holders. 750 staff are losing their jobs as a result of the bank shutting down its retail operations here.
*** Aer Lingus holds its AGM in Dublin this afternoon, and major shareholder Ryanair plans to vote against one of the resolutions, part of which would mean shareholders would have to table resolutions for EGMs sooner than they do now. Aer Lingus wants to be able to call an EGM at 14 days notice, changing it from the current 30 days.
*** On the currency markets this morning, the euro is trading at $1.2398 cents and 83.5 pence sterling.
