Today in the press

Monday 16 September 2013 10.55
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

ANGLO TAPES: FORGET REALITY, IT'S NOT WORKING - DAVID DRUMM - Worried Anglo Irish Bank chiefs wanted the Central Bank to express confidence in the bank's financial position, despite knowing the institution was in crisis. A full 10 months before the bank guarantee, the troubled Anglo chiefs were desperate to defend their weakening financial position and stave off attacks from international investors. The latest Anglo Tapes in the Irish Independent reveal that a conversation between Anglo chief executive David Drumm and head of treasury John Bowe in November 2007 included discussion on how the then Central Bank governor, John Hurley, might be persuaded to help them out. At the time, "the hedgies" - the ruthless London-based investment funds - were betting heavily on Anglo Irish Bank's shares dropping in value. Mr Drumm and Mr Bowe discuss whether it would be possible to get Mr Hurley to make a public statement of confidence in the Irish banks. At one point, Mr Drumm snaps: "No, no, forget about reality because it's not working. Is there anything they (Central Bank) could say?" But it is also clear the bank chiefs knew that Ireland's credibility on the international market was already damaged and that any statements could backfire.

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DAIRY PRODUCER AURIVO DENIES MANIPULATING QUOTA SYSTEM - One of two dairy processors involved in a High Court action over milk supplies has hit back at claims it is using the milk quota system to force a competitor out of business, says the Irish Times. Donegal-based Green Pastures and Natural Dairies, part of a group owned by the Molloy family, are suing a competitor, Aurivo, claiming it is using its excess milk quota to lure their suppliers into breaching their supply contracts with the companies. They have told the High Court this is part of an Aurivo campaign designed to drive the group out of business. However, Aurivo said at the weekend that milk quota remains at all times under the ownership and control of individual farmers. “Milk processors have no role in determining what quota an individual farm or farmer is allocated,” it said in a statement. Aurivo also pointed out that farmers have the right to transfer between milk processors, once they give three months and one day’s notice. The co-op said the fact that milk suppliers can move between milk processors was a key reason why the Competition Authority approved Connacht Gold’s acquisition of Donegal Creameries dairy business last year, the deal that created Aurivo. “The authority concluded that Aurivo would not be dominant in the market for the acquisition of raw milk, in Donegal or at all,” the co-op said. It also accused Green Pastures of a lack of transparency as it does not disclose the price it pays farmers, although it maintains it pays more than the co-op.

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BOB DIAMOND CALLS FOR BANK RULES SHAKE-UP - Bob Diamond - the former head of Barclays who tried to buy Lehman Brothers before its collapse five years ago - has joined a chorus of criticism over the lack of progress in ending banks’ “too big to fail” status. Citing “insufficient” progress in ways to safely wind down failing financial giants, Mr Diamond has called for fresh international co-ordination to end the fragmenting approach to bank regulation. Writing in the Financial Times, the former banking boss expresses an apparent change of heart about the risks that Barclays and other banks were taking in the years before the crisis, by admitting that leverage was “too high in the boom years”. He says that various regulatory advances have helped cut risk in the system but warns: “A global framework is required if we are to avoid the kind of capital regulatory arbitrage that weakened the financial system.” Mr Diamond’s comments - a rare public outing since his ejection from Barclays by regulators a year ago - reflect broader concerns among investors and officials that government powers to deal with the failure of the largest financial institutions are still inadequate.

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HOUSE PRICES TO CONTINUE SURGE AS BUBBLE FEARS GROW - House prices are set to increase far faster than first thought, according to Britain’s biggest online property site. Rightmove, which advertises thousands of properties across the UK, said it was uprating its forecast for annual house price inflation from 4.5% to 6% with a vigourous autumn in the UK property market expected, says the London Independent. The decision will add further weight to the argument of Business Secretary Vince Cable that the UK property market could be in danger of overheating and that interest rates may have to rise sooner rather than later. However, Mr Cable’s analysis is disputed by his own party leader, Nick Clegg, who insists the market is not about to experience a ‘bubble’. Miles Shipside, Rightmove director and housing market analyst, said: “While prices fell in the month overall, the last couple of weeks have seen the start of a turnaround as more sellers choose to come to market and pitch at higher prices as momentum rebuilds”. He said the fact that the site has raised its estimate for price growth for the year to 6 per cent is partly driven by the strength of southern markets but with a nod to the increasing growth contribution by the more buoyant areas of the north. Rightmove’s bold message on prices came despite a slight slip in asking prices of 1.5% in the past month, leaving the average property on the market at £245,495.

Keywords: presswatch