LEADING ENTREPRENEUR HITS OUT AT 'ASTOUNDING' EDUCATIONAL GULF - Ireland is suffering from a "strong disconnect between education and the real world," one of Ireland's best-known entrepreneurs, Jerry Kennelly, has warned. 

Too many school-leavers are being directed by family and educators into jobs such as accountancy that are most at risk from automation in coming years, while the country is producing too few computer science graduates, he said. Mr Kennelly - who made about €110m selling his picture business to Getty Images in 2006 - also said that he has no plans to sell any stakes in his Tweak.com venture, or to float the business. He has invested more than €20m in the venture. "The reality is that the country is full of low-skill, low-salary jobs," Mr Kennelly told the Irish Independent. "We really have to look at where we're at. A lot of the high-salary jobs are with foreigners because we haven't educated or trained people for them. Most of the people who work in call centres in Ireland are graduates of third-level education and most of them are never going beyond where they're at €23,000 or €25,000 salaries," he added. "There's an astounding, shocking disconnect between the education system and the real world," he stated.

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CENTRAL BANK LETTER WARNS ABOUT MORTGAGE LENDING - The current growth in mortgage lending, if it persists, could pose a systemic risk to the Irish economy, Central Bank researchers have warned. 

Even with the Central Bank's strict mortgage lending rules, introduced in 2015 to guard against another property-related credit bubble, new mortgage lending jumped by 29% last year to nearly €7.3 billion, says the Irish Times. In an economic letter, published today by the Central Bank, the researchers warned that if this rate of increase were to continue in 2018 and household incomes rise in line with current forecasts of about 3.5%, "excessive cyclical risks" related to mortgage lending may emerge. They said while there was no reason for a policy intervention at this stage, the level of mortgage activity needed to be "carefully monitored". In the letter, Central Bank researchers Enda Keenan and Martin O’Brien noted that "house price bubbles and bursts, unsustainable credit growth and systemic financial crises have often accompanied each other". As a result, particular attention is now being paid to indicators that can "gauge the build-up of systemic risk" related to residential real estate and mortgage credit.

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'MESSY' OUTCOME TO PERMANENT TSB LOANS PLAN - Permanent TSB may seek to securitise the €900m in so-called split mortgages it has decided to strip out from its distressed mortgage sales plan.

This marks "a very messy" and potentially costly outcome to a sales process mired in political controversy, said Owen Callan, a senior analyst at Investec Ireland. The bank has cut back an original plan to sell off €3.7 billion worth of troubled home loans and buy-to-let mortgages and will instead sell off loans, worth €2.2 billion, linked to 11,200 properties to new buyers, who are likely to be vulture funds. Some 70% of the troubled loans Permanent TSB plans to sell are currently principal homeowners. The bank will no longer attempt to sell €900m worth of split mortgages, a plan which had thrown up political opposition and led to a bill, sponsored by Fianna Fáil finance spokesman Michael McGrath, to apply Central Bank regulation to vulture funds, beyond the service providers as applies currently. Permanent TSB didn’t spell out its specific plans but Mr Callan said it will have the option to securitise the loans, particularly for the split mortgages, writes the Irish Examiner. Such a process would mean the underlying risk of the loans would no longer be carried on its balance sheet but upfront costs and service provider fees are not known at this stage, he said. The sale of split mortgages is particularly controversial because the Central Bank had once promoted split mortgages as a way for lenders to work through their crisis-era problem home loans.

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BIG FOUR ACCOUNTANCY FIRMS PLAN FOR FORCED BREAK-UP OVER CARILLION - The Big Four accountancy firms have drawn up contingency plans for a break up of their UK businesses, an option politicians and regulators are increasingly pushing to solve conflicts of interest embedded in the industry. 

The pressure on the four firms that dominate the sector - KPMG, Deloitte, EY and PwC - to prepare for a forced break-up has increased following high-profile corporate collapses that have called into question the quality of their work as both auditors and consultants for the UK's largest companies. Executives from all four and the next largest UK audit firms, Grant Thornton and BDO, said they had planned for a potential break up, in case regulators force them to spin off their audit from their consulting businesses, says the Financial Times. A parliamentary report this week urged the competition watchdog to consider breaking up the four, saying they operated as a "cosy club incapable of providing the degree of independent challenge needed". It followed a probe into the collapse of government contractor Carillion in January. The investigation triggered sharp criticism of KPMG and Deloitte, Carillion’s external and internal auditors respectively over the past 19 years, and of EY and PwC, which had various consulting roles. A break-up scenario could involve two options: either forcing each large firm to split into two smaller multidisciplinary firms; or making all of them spin off their consulting work to create audit-only businesses. This second option was backed by Stephen Haddrill, head of the UK accounting watchdog, in February as a potential remedy for the lack of competition in the market.