ICELAND TURNS TO HONOHAN FOR HELP WITH MONETARY POLICY REVIEW - Iceland, which returned to financial normality earlier this year by lifting remaining capital controls stemming from the 2008 crisis, has enlisted former Central Bank governor Patrick Honohan to help with a review of its future monetary policy direction.
Professor Honohan confirmed to The Irish Times that he has been asked by the Icelandic ministry of finance and economic affairs to co-write a report on the country’s inflation targeting and challenges of conducting monetary policy. Professor Honohan is working with former Cypriot central bank governor Athanasios Orphanides on the report. Their work is due to be completed by the end of this year, Professor Honohan said. Iceland was forced to introduce capital controls, covering the movement of money flowing in and out of the country, nine years ago as it sought to stabilise one of the world’s smallest currencies after its three largest banks, whose assets were 10 times the size of the island nation’s economy, collapsed. Iceland’s new coalition government, led by prime minister Bjarni Benediktsson, committed in January to reviewing the country’s monetary and currency policy as its economy continued to rebound in recent years following the crisis, driven by tourism growth, and as the value of the krona appreciated as capital controls were loosened.
***
DUNNES MAKES MAJOR CHANGES TO BOARDS - Operational control of Dunnes Stores - Ireland's third-largest grocery retailer - is undergoing what is arguably its biggest change in more than a generation, as matriarch Margaret Heffernan increasingly cedes much of her hands-on role at the dynasty to her daughter, Anne.
Anne Heffernan (49) and Margaret Heffernan's niece, Sharon McMahon (47), have both just been appointed directors of all Dunnes Stores companies. While they've both been involved in the secretive Dunnes Stores business for some time, industry insiders say that Anne Heffernan is now the de facto leader of day-to-day operations, especially on the food side. Sharon McMahon is understood to be running the retail group's property and investment interests. She has previously been reportedly involved in the textiles side of the retailer. The company did not respond to a request for comment, writes the Irish Independent. For years, there has been continuing speculation about whether Dunnes Stores could be sold, or if a new generation would gradually succeed Margaret Heffernan (75) and her brother, Frank Dunne (74), who for decades have been the duo in charge at the business. The recent raft of directorship appointments across the group companies, and Anne Heffernan's deep involvement in operations, now appear to cement a strategy to see the chain remain in family control.
***
SURVEYORS CALL FOR 'RADICAL' ACTION ON HOUSING CRISIS - The Society of Chartered Surveyors has called for a zero Vat rate for building "affordable" homes as it warned pent-up demand could mean the housing crisis will last almost 10 years.
The society published research last year, called the Real Cost of New House Delivery, which it said showed that over half of the €330,000 costs in constructing a three-bed home was accounted for by Vat, levies, infrastructure, finance costs, and a profit margin. In a pre-budget submission, the surveyors said Vat cuts on building affordable homes, along with other "radical measures", would help boost the supply. On current trends, the market demands of 35,000 new homes a year would not be met until 2026, it said. The society also seeks changes in the capital gains tax regime to encourage investors to sell land for affordable housing, writes the Irish Examiner. In recent months, analysts have increased their estimates for the number of new homes that will be required to meet a burgeoning demand, after Census revisions showed the population was growing faster than first thought. Official statistics for the number of new homes under construction this year have also been questioned.
***
STEVEN MNUCHIN SOUGHT US AIR FORCE JET FOR HONEYMOON - Steven Mnuchin, US Treasury secretary, inquired about the use of a military aircraft to go on honeymoon this year but his department later decided to withdraw the request.
A Treasury spokesperson said the department considered the use of a military aircraft among a range of options because of the need to ensure secure communications during Mr Mnuchin’s extended travel. The request for an air force jet was first reported by ABC News, which added that the US Treasury’s Office of Inspector General was now looking into the matter. Mr Mnuchin was married to Scottish actress Louise Linton in June and the couple subsequently travelled to Scotland, France and Italy. It is not the first time Mr Mnuchin has faced scrutiny over his travels, writes the Financial Times. The Inspector General is inquiring into the couple’s trip last month to Kentucky, which involved a viewing of the solar eclipse. The Treasury has said the purpose of the trip, which involved a government aircraft, was to conduct meetings on tax reform. The Treasury spokesperson said on Wednesday night that Mr Mnuchin was involved in many national security issues, including North Korea, Iran and Venezuela, and that it was "imperative" that he have secure communications.
