LUCEY URGES GOVERNMENT TO TAKE ACTION ON FORMER BANK BOSSES' SALARIES - An editorial in this morning's Financial Times calls on former chiefs in Ireland's bailed out banks to think 'long and hard' about their response to calls for a voluntary cut in their pensions. The editorial tells them that while a pension cut might not be enough to salvage their honour, failure to act will 'guarantee their status as pariahs'.
Brian Lucey, Finance Professor at Trinity College Dublin, says the Government needs to demonstrate political will on the issue instead of citing contractual difficulties. 'It's grossly insulting of the Government to wring their hands and do nothing. It's insulting to people who have already taken cuts,' he states. Professor Lucey points out that if the Government can override the contractual rights of individuals in private companies, then it can go into institutions that it essentially owns and force changes.
On pay levels in IBRC, which were defended by CEO Mike Aynsley in an interview in the Irish Independent today, Professor Lucey says it was is necessary to pay 20 times the industrial wage to people who were essentially working in a debt collection agency. ''Anglo is a debt collector. We could put their debts on eBay. We could hire a debt collection agency. We don't need to pay half a million euro to do this,'' he states. He says litigation would likely follow, but the Government had deeper pockets and can hire better lawyers to take on individuals in the courts.
Speaking on Morning Ireland, Minister Leo Varadkar says the pay in IBRC is an issue that would have to be 'pursued with more vigour'. Some of the salaries '''were far too high'', he adds. However, he warns that there were contractual obligations and said the salaries were not paid directly by the state and a cut would mean less to the exchequer in income tax.
MORNING BRIEFS - China's inflation rate fell further last month. That gives more room for further stimulus measures to generate more growth. Consumer prices rose 1.7% from a year earlier, the slowest pace since January 2010. There is speculation that the world's second biggest economy might cut interest rates again to boost domestic demand to offset a fall in exports and reverse a slowdown in economic growth. China's growth rate hit a three-year low in the second quarter.
*** Global stocks declined overnight led by a big share sell off in Asia. The moves can likely be attributed to worries over a slowdown in the US which is facing a possible fiscal crisis in the new year. The ''fiscal cliff'' is a package of tax hikes and spending cuts to the tune of hundreds of billions of dollars. They will kick in if no compromise is reached on how to cut the deficit before then. There are fears that that could drag the US back into recession next year. Europe is not helping matters as uncertainty over Greece and Spain still lingers. Mario Draghi gave little cause for hope at his news conference at the ECB monthly meeting yesterday.
*** IMC Exploration Group has announced to the stock exchange that it will intensify drilling activity near Camolin in Wexford. The site is a few kilometres from a previous strike area where enhanced values of gold, silver, lead and zinc were reported by IMC in September.