INTERNATIONAL FINANCIAL SERVICES SUMMIT TO HEAR FROM EXPERTS ON IRELAND'S CHALLENGES - The International Financial Services Summit is being held in Dublin today and among its speakers are Central Bank Governor Professor Patrick Honohan. The summit is bringing together a range of international economic experts and financial service industry commentators to discuss regulation and the future of the financial services industry.
Gillian Tett, associate editor of The Financial Times, is also speaking at the conference today. She says the timing of the conference is extraordinary given the situation in the country at the moment. Ms Tett spent some time in Japan during its depression and says the Irish situation in uncannily similar, citing 'circling vultures, market panic and hedge funds who are sharpening their fangs'. She says there are two lessons to be learned from the Japanese experience - problems can not be brushed under the carpet and deflation will lead to economic stagnation. She warns that the Japanese never really had faith that all the bad news had been flushed out of the system and says the Government has to get everything out in the open.
On EU Commissioner Rehn's visit to Dublin this week, the FT journalist says that it was 'appropriate'. She says Olli Rehn lived through the Finnish economic crisis and shows that a country can go to hell and back again and live to tell the tale. She says she admires Ireland's 'fighting spirit' and adds that the country still has a high level of social cohesion. But she warns that enormous challenges remain and new ones may emerge, such as the growing problem of mortgage arrears.
Ms Tett says the big problem surrounding Ireland currently is uncertainty. She says the markets are concerned about mortgage arrears, the level of support that will be forthcoming from the EU and the ECB and the political situation. She says the Government is not in a position to resolve all the questions.
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MORNING BRIEFS - The bank guarantee that covers lots of Irish retail, corporate and interbank deposits is set to be extended by another six months after its last extension in September. The Eligible Liabilities Guarantee has been around for almost a year now. It replaced the blanket guarantee which was brought in in September 2008. It has to be reviewed and approved by the European Commission every six months, and would expire on December 31 this year. The Deposit Guarantee Scheme, which covers 100% of deposits, up to €100,000, with all of the credit institutions authorised in Ireland, does not have an end date.
*** The Irish Times reports that two senior bankers at Anglo Irish Bank are being investigated for lodging money offshore with Anglo, withdrawing the money and then trying to delete any record of the accounts. The Garda Bureau of Fraud Investigation is investigating the matter and the two former executives have been contacted by detectives. Gardaí are investigating if the monies were generated from activities that were never declared to Revenue or if there was another reason why the accounts were emptied and erased.
*** There is also news today of AIB paying out almost €10m in bonuses to 90 staff and that more than a third of Irish Nationwide's residential mortgages is in arrears.
*** On the currency markets, the euro is trading at $1.3766 cents and 86.02 pence sterling.
