BANK GUARANTEE DOWN TO FINAL €2.5 BILLION - The bank guarantee, which resulted in billions in bailouts and a temporary loss of the State's economic sovereignty, is now down to insuring €2.5 billion of lenders' liabilities.
Some €400 billion of bank deposits and bonds were covered by the initial guarantee following its introduction in September 2008. This was done to stave off a collapse of the financial system, weeks after the fall of Lehman Brothers. A spokesman for the National Treasury Management Agency gave the most recent figure, which is for the end of April. "The total liabilities covered by the State have reduced by more than 99% from the peak," said Philip O'Sullivan, an economist with Investec in Dublin. "This is a reminder of how the contingent liabilities that had been on the sovereign as a result of the financial crisis are now nearly extinguished." The guarantee has been the source of controversy since its introduction, with the State forced to commit a gross €64 billion to banks to help them pay off bondholders and depositors and meet rising regulatory capital requirements, says the Irish Times. While an Oireachtas banking inquiry found in January that regulators assured ministers in September 2008 that assets of all six lenders to be covered by the guarantee outstripped their liabilities, the word "solvent" as it pertained to the banks was removed from the final statement announcing the blanket coverage. The State was later forced into a €67.5 billion international bailout in 2010 as the cost of bailing out the country's banks became too much for the sovereign to handle.
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BANK OF IRELAND FACES €60m CLAIM OVER TRACKER MORTGAGES - Bank of Ireland is facing a €60m-plus claim to compensate British and Irish investors who bought buy-to-let properties.
The bank changed the margin on their tracker mortgages, in a move that more than doubled repayments in many cases, says the Irish Independent. A campaigner who won a similar case against West Bromwich Building Society last week says he has queen's counsel opinion that Bank of Ireland is in breach of contact. Mark Alexander, who spearheaded a campaign that led to last week's win in Britain's Court of Appeal, said his group had now raised half of the funds it needs to take on Bank of Ireland in the British courts. Some 13,000 buy-to-let investors, many of them Irish, are affected. They took out mortgages that were supposed to track the Bank of England rate at a set margin over the lifetime of the loan, but from May 2013 the bank moved the rate from the base rate plus 0.75% to the base rate plus 4.49%. The mortgages were taken out with Bristol & West, which was owned by Bank of Ireland, but has since been shut down by the bank, and the mortgages serviced by Bank of Ireland UK.
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LONDON STOCK EXCHANGE HERALDS IRISH SMEs - Twenty-one Irish firms have been named among Europe's top 1,000 high-growth SMEs in a prestigious ranking compiled by the London Stock Exchange.
The report singles out the positive impact of Irish SMEs for particular praise with the 21 named businesses "boasting an impressive average revenue of €57m". Irish companies are represented across a wide range of industries including healthcare, agriculture, marketing, and logistics, says the Irish Examiner. The greatest representation was to be found in the manufacturing and engineering sectors where six firms made the cut. London Stock Exchange Group CEO Xavier Rolet said it was the likes of the Irish SMEs that are driving the European economy.
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BLUE CHIPS THREATEN TO SUE LEAVE CAMP OVER LEAFLET THAT USED LOGOS - The chiefs of some of Britain's biggest employers have threatened legal action against the official EU Leave campaign, after it included their corporate logos in a taxpayer-funded referendum leaflet implying that they supported Brexit.
Top executives of General Electric, Unilever and Airbus wrote to Vote Leave claiming that it had misused public funds and used the logos "for propaganda purposes" when, in fact, they supported Britain's EU membership, says the Financial Times. The move came as the Remain camp sought to wrestle the national debate back to the threat to household finances and the economy from Brexit, with a new TNS poll giving Leave a 47-40 point lead. George Osborne said on Wednesday that Brexit would soon lead to spending cuts and tax rises of more than £30 billion a year, a claim that drew the scorn of 65 Tory MPs who said they would block any post-Brexit austerity Budget. The chancellor will redouble his warnings in his annual Mansion House speech on Thursday. On Wednesday, Janet Yellen, chair of the Federal Reserve, said doubts around Brexit had been one of the factors in the US central bank's decision to hold interest rates.
