TAOISEACH TELLS EU TO STAND BY IRISH BANK DEBT PLEDGE - Taoiseach Enda Kenny has demanded EU leaders “stand by” their decision to ease Ireland’s banking debt, warning of damage to trust between member states. EU economics commissioner Olli Rehn said yesterday there were “different interpretations” of what was agreed at the June EU summit in relation to using the euro area’s bailout fund to recapitalise banks. However, Mr Kenny inisted last night the decision was binding and called on fellow leaders to demonstrate they could follow through on the agreement, writes the Irish Times. “In meetings of EU leaders one of the problems you find is the missing element is trust that if they make a decision they will stand by it,” he said at the International Bar Association conference’s opening in Dublin. “There is a need for transparency, for decisiveness, for clarity,” he said, departing from a prepared script. Finance ministers from Germany, Finland and the Netherlands delivered a surprise blow to Ireland’s campaign for debt relief last week when they argued national bodies should remain liable for most bank losses. Mr Kenny’s comments last night echoed remarks contained in his speech to Fine Gael’s presidential dinner on Saturday night, when he insisted a binding decision had been taken by heads of state. “There is no resiling and going back from a formal decision made by the leaders of the 27 countries of the European Union,” he said. “I was happy that at that meeting in June there was a clear and unequivocal decision made not by ministers, not by civil servants, not by commentators but by the heads of government of the 27.”
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HOW OFFSHORE TRUSTS ARE BEING SET UP BY STRESSED BORROWERS - Under-pressure borrowers are using off-shore trusts and companies in countries such as Russia, Mauritius, Gibraltar and the Cayman Islands to put assets beyond the reach of Irish banks. The Irish Independent says that a leading global fraud network has heard that cross-border asset transfers are on the rise here and throughout Europe as borrowers turn to sophisticated financial instruments to protect their assets and move them beyond the reach of creditors. The latest trends were revealed last Friday at a conference on fraud and asset recovery hosted by FraudNet, the international legal group that helps victims and governments locate and recover stolen assets. The conference was held days ahead of a Supreme Court appeal move by Sean Quinn Jnr, who is challenging a finding of contempt against him and a three-month jail sentence for breaking court orders preventing any interference with the Quinn family's €500m international property group (IPG). The global scheme by Sean Quinn Snr, his son Sean Quinn Jnr and nephew Peter Darragh Quinn to place assets beyond the reach of the former Anglo Irish Bank, is the largest asset-stripping scheme to come before the Irish courts.
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Britain's new chief financial policeman has issued a stark message to the City of London: "We have barely got started." In an exclusive interview with the London Independent, Martin Wheatley, the head of the new Financial Conduct Authority, warned that people who believe watchdogs are already too tough have "a big wake-up call coming". Accusing bankers of avoiding responsibility for misconduct by hiding behind committee management, he raised the prospect of US-style prosecutions of senior executives: "In the future we want individuals held to account." The FCA, which will replace the Financial Services Authority, will have the power to launch raids on City offices and bring criminal prosecutions. Mr Wheatley, pictured, who last week recommended that bankers who attempt to manipulate Libor face criminal prosecution, pledged to investigate and expose potential abuses in other sectors of the financial-services industry. That could include the gold and silver markets, oil, foreign exchange and even agricultural commodities. "We will shine a light into a number of dark corners and we will have to take action depending on what we find," Mr Wheatley said. The regulator also accused banks of mistreating their customers to an extent that would be unimaginable in other consumer businesses.
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GRADUATES TURN AWAY FROM WALL STREET - More graduates are opting for careers outside investment banking as the pull of big bonuses is replaced by job insecurity in an industry struggling to adapt to regulatory change, writes the Financial Times. MBA statistics show a steady decline in the number of graduates taking jobs at investment banks. The Wharton school at the University of Pennsylvania, which bankers consider the “conveyor belt of Wall Street”, sent 16.6% of its class to investment banks in 2011 compared with more than one in four in 2008. The pattern is similar at other large business schools. “The number of students going into financial services has remained steady but what’s changed has been the types of roles,” said Maryellen Lamb, director of MBA career management at Wharton. “We’ve seen more opportunity for students in private equity and hedge fund roles.” Goldman Sachs’ decision to end its two-year graduate training programme caused ripples on university campuses. The bank has decided to hire graduates on an open-ended basis partly due to worries that some were defecting to private equity firms after the two years were up. “They’re out there on a limb by themselves now,” said one campus recruiter at a rival bank, whose company is considering following the practice. “It’s going to be interesting to see whether it’s positive or negative from a campus recruiting standpoint.”
