G20 MEETING IN PARIS TO FOCUS ON DEBT CONCERNS - The latest downgrade of Spain by Standard & Poor's and the downgrades of three banks in Switzerland and the UK by Fitch all came ahead of today's meeting of the G20 finance ministers in Paris.
Jeremy Batstone, head of research at Charles Stanley in London, says the latest downgrade for Spain was a reflection of a weak outlook for its economy and the country's ability to get to grips with its substantial debt to GDP ratio. He says the pace at which those in authority - such as Christine Lagarde of the IMF - are coming to terms with the sovereign debt issue is really speeding up. Mr Batstone says that a major recapitalisation of the banks is on the way, but questions remain as to whether this injection of capital will be made on a piece-meal way. This would leave the likes of Spain and Italy out on a limb, he warns.
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KEY CREDIT UNION REPORT TO BE PUBLISHED TODAY - The Department of Finance will release its interim report on the commission examining credit unions later today. There are concerns that property related lending has placed some credit unions close to collapse while a figure of around €1 billion has been put on what is needed to make the sector stronger.
Colm O'Grady, from Athlone accountancy firm Russell Brennan Keane, says the main problems facing the credit unions is the growing level of arrears with about 20% of the unions not meeting solvency ratios. He says the last two weeks have been dramatic for the credit union movement, with the news from Finance Minister Michael Noonan that it may need up to €1 billion in recapitalistion funds and the legislation going through the Dáil. He says today's report should bring some clarity and direction to the country's 400 credit unions. However, Mr O'Grady says that credit unions remain robust and despite the loan arrears they have strong provisions. He says the sector has cleaned up its act and has faced up to its problems.
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MORNING BRIEFS - The Irish Dairy Board is due to open a new €12m food ingredients manufacturing plant at Leek in Staffordshire in the UK.
*** Google, the internet search engine, said last night that its net income in the third quarter surged 26% to $2.73 billion, up from $2.17 billion the same time last year. Earlier this year, Google launched Google+, a social network to take on Facebook. Revenue rose 33% to $9.72 billion.
*** The euro this morning is worth $.3790 and 87.37 pence sterling on the currency markets.
