TROIKA TO RAISE PROPERTY MARKET POLICIES AND WATER DEBACLE - Officials from the EU-IMF troika will raise property market policies and the water debacle with the Government next week when they return to Dublin for their second post-bailout inspection of the year.
The overhaul of the corporate tax regime will also be raised during the scheduled mission, as will the Government's overall economic strategy and the budget plan for 2015, says the Irish Times. Given the rapid advance in residential property values in Dublin particularly, the troika officials are likely to examine whether sufficient steps are being taken to increase the supply of housing in big urban areas of the State. Their visit comes amid discord over Central Bank plans to dampen down the property market with new restrictions on mortgage lending. With mortgage debt crisis still unresolved, the visiting officials will take stock of ongoing efforts by the banks to deal with non-performing loans. As part of this exercise they will scrutinise the development of arrears, banks' engagement with defaulting borrowers and the flow of repossession cases. The troika will be in Dublin as the Government reworks its contentious plan to charge households for water. This initiative was a key condition of the bailout programme so it falls to be examined by troika officials.
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AIB BEATS PENSION CRISIS AFTER €1.1 BILLION LOANS BAILOUT - Taxpayer-rescued AIB Bank and RTE have emerged as having the best-funded pension schemes. AIB was allowed to move €1.1 billion off its balance sheet to shore up its pension two years ago. This has meant the deficit in its defined benefit pension scheme, which amounted to €763m at the end of 2011, has now all but disappeared. A new report from pensions advisers LCP found that the bank's scheme is now 98% funded - its assets are almost equal to its liabilities, says the Irish Independent. The details on the pension came as AIB boss David Duffy is set to tell an Oireachtas Committee today that there were 942 AIB staff members on remuneration packages of over €100,000 out of a workforce of 12,648 at the end of last year. The health of the AIB pension is in contrast to situation at most other large companies and public bodies where deficits have ballooned. The combined deficits in the pension funds of publicly quoted and semi-state companies has doubled to more than €8.5 billion this year. LCP looked at the financial health of 16 of the largest Irish-quoted companies and 13 semi-state or State-controlled companies with defined benefit schemes. These schemes are disappearing in the private sector as they are hugely expensive to fund. They promise two-thirds of salary at retirement for those with full service. A tax-free lump sum can also be taken, but that reduces the annual pension.
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REPOSSESSIONS OF PTSB MORTGAGES TO INCREASE - The number of Permanent TSB mortgage holders who will face repossession is set to increase in the coming years, the bank's head of asset management confirmed yesterday. PTSB asset management unit managing director, Shane O'Sullivan made the announcement yesterday at an appearance of the bank's top level executives in front of the Oireachtas Finance Committee, reports the Irish Examiner. Mr O'Sullivan stressed, however, that the rise would be coming from a very low base with 23 repossessions executed to date this year - the vast majority of which involved vacant properties. "I think it's correct to say that the number of repossessions will increase. A number of points I would make about that though: they will increase from a very low base - so far this year we have had 23 repossessions, that's 0.01% of our stock of properties. Each day myself and my team look to see if we can find solutions for customers and in 12,351 cases we have found solutions," he added.
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RECORD FINES CARRY STRONG ECHO OF LIBOR SCANDAL - The Financial Times says that the sprawling investigation into whether the $5.3 trillion-a-day foreign-exchange market was manipulated has everything and nothing to do with an earlier probe into the manipulation of Libor. The Libor scandal, which first attracted regulatory scrutiny in 2008, cast a long shadow on Wednesday’s record-breaking deal, where six banks paid $4.3 billion to US, UK and Swiss regulators to settle allegations that they attempted to rig foreign exchange, one of the world’s biggest financial markets. This was explicit. The UK’s Financial Conduct Authority said its heaviest fines in history were meted out in large part because banks had not learnt the lessons of Libor, despite financial institutions paying more than $6 billion so far in penalties and despite 19 former traders and brokers facing criminal charges as a result of the ongoing probe. “Firms could have been in no doubt, especially after Libor, that failing to take steps to tackle the consequences of a free-for-all culture on their trading floors was unacceptable,” said Tracey McDermott, the regulator’s enforcement head. Just as Libor sparked changes in the sector, Wednesday’s actions are expected to accelerate reform in the forex markets. Earlier warnings were loud and clear: the governor of the US Federal Reserve, Dan Tarullo, last month said that recidivist banks faced even stiffer penalties. The Fed was still investigating banks over forex, it said on Wednesday.
