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• Former banker to have his say on crisis

  August 31, 2010 @ 6:56 pm | by John Collins

  Quite a number of books have been rushed out on the Irish banking crisis but they have all been from members of the media. Which is why next month’s publication of the provocatively titled Open Dissent: An Uncompromising View of the Banking Crisis by former Bank of Ireland chief executive Mike Soden should be interesting.

  The book is published by Blackhall Publishing, which says it will be “direct and honest” and given his unique position “he is able to look at the crisis from an outsider’s perspective with an insider’s knowledge”.

  Soden seems to be enjoying his perch on the sidelines of late and his outspokeness suggests the book will be worth a read.  Soden was last seen out and about last month at the One 51 AGM admonishing chief executive Peter Lynch over his pay.  Open Dissent is available to pre-order through Amazon.

• BBC2′s Freefall hits the credit crunch feel-bad factor

  July 15, 2009 @ 9:17 am | by Laura Slattery

  With very strong language and some scenes of a sexual nature, the first “credit crunch drama” hit TV screens last night, almost two years after terms such as Libor rates and Ninja loans became common currency. Freefall, a BBC2 film by Dominic Savage featuring Irish actor Aidan Gillen, is the only TV show I’ve ever seen to feature explanations of collateralised debt obligations (CDOs) and such dialogue as “somebody get on to Asia… monolines won’t even look at deals like this anymore”. Cue credit card cocaine chopping in the men’s loo.

  As one-off dramas go, Freefall was a little subprime. The tripartite story structure, which followed a thrill-seeking CDO trader, a pushy mortgage broker and a shopping centre security guard with a bad credit record, didn’t really make any attempt to draw the connection between the mounting misery of all three. But while some scenes stank of unreality, the logic behind the rampant borrowing seemed all too grimly familiar. You speculate to accumulate, and all that.

  “You don’t own anything,” the pushy mortgage broker tells his old schoolmate during an espresso-fuelled sales pitch. “We don’t owe anything,” the security guard counters, but a few minutes later he’s signing for a catch-ridden introductory discount mortgage that will buy him a mock-Tudor suburban palace. His wife is bemused: “I just don’t see how we can have this. We don’t have any more money than we did last week.”

  She had been perfectly happy in their rented council house – the kind of place you would want to escape from, it was implied, but which looked disarmingly like the kind of sought-after place that Dublin house-buyers were faking pay slips in order to afford during the height of the Irish property boom. Back at the subprime lender office, a colleague is aghast: “You just sold a discounted mortgage to an old mate. Have you not got a conscience?”

  It’s safe to say happy endings in Freefall were as about as elusive as a penalty-free fixed mortgage. But in a world where a recession sparked by the excesses of a financial sector can result in 30 million job losses in OECD countries while around 30,000 Goldman Sachs employees remain on course for a six-digit pay increase, it would be hard to find much about the banking bubble and its bursting that would make good source material for a heart-warming tale.

• Bank of Ireland overtakes AIB on market

  May 7, 2009 @ 9:42 pm | by Simon Carswell

  Bank of Ireland must be taking at least a little satisfaction this week after overtaking rival Allied Irish Banks (AIB) to become the biggest Irish bank in terms of market value.

  Bank of Ireland, traditionally second behind AIB, closed at €0.93 on Tuesday, valuing the company at €943 million, compared with AIB’s price of €1.04, valuing the bank at €922 million. (Bank of Ireland may have had a lower share price, but it has 1 million shares in issue, compared with AIB’s 883 million.)

  Things got even better for Bank of Ireland today, as the bank closed at €1.33, giving the bank a market value of €1.34 billion, compared with the €1.03 billion value of AIB.

  The market is clearly pricing in “the Nama effect” – how much both banks will have to transfer in loans to the State’s “bad bank”, the National Asset Management Agency (Nama), and the likely crystallised losses, capital requirements and, ultimately, the Government’s ownership in each institution. (more…)

• Desmond entertains in the IFSC

  April 28, 2009 @ 1:13 pm | by Simon Carswell

  Billionaire financier Dermot Desmond spoke yesterday in a public interview with Newstalk radio station at the National College of Ireland and entertained the audience with his views on the world of business and what has driven him in his wide and varied career and investments.

  He opposed the National Asset Management Agency, the State’s “bad bank”, saying that he preferred for the problem property loans to remain within the banks and to be worked out over time. He raised an important point – if the Government feels that an additional €5 billion is enough for Allied Irish Banks and €3.5 billion for Bank of Ireland, why should there have to be further write-downs on their property loans? (more…)

• Getting confidence back – Davos told it’s a question of coconuts

  January 31, 2009 @ 12:03 pm | by Simon Carswell

  Montek Alhluwalia, deputy chairman of India’s planning commission, told delegates at the Davos economic forum in Switzerland this morning that the world needed to have confidence again. He said that confidence grows like a coconut tree but falls like a coconut. He said that India was still expecting 7 per cent economic growth this year. This isn’t far off what Chinese premier Wen Jiabao predicted for his country during his speech in Davos on Wednesday night – he said that even though he believed China’s forecast of 8 per cent growth this year was “a tall order” he still believed it was attainable.

  This morning Japanese prime minister Taro Aso  said he had decided on an economic stimulus package of about 75 trillion yen or US$840 billion with fiscal measures amounting to 12 trillion yen or $135 billion, which corresponds to about 2 per cent of Japan’s GDP. Mr Aso said that he would pledge not less than $17 billion in development assistance to Asian countries. The Japanese PM ended his speech with a quote from French philosopher Alain: “Pessimism comes our passions, optimism from the will.” Certainly, the Russian and Asian participants are far more sanguine than their Western counterparts at Davos this year.

  It’s worth noting that Japan treated delegates to a fine sushi lunch in Davos headquarters, the Congress Centre – a sign that at least there is no culinary slump at the Swiss think-in this year.

• Cowen has no time for skiing in Davos, O’Brien not worried by Slim

  January 30, 2009 @ 4:36 pm | by Simon Carswell

  Taoiseach Brian Cowen had a busy morning at the Davos economic forum today, meeting world leaders in back-to-back sessions. Among the leaders he met was Fredrik Reinfeldt, prime minister of Sweden, which takes over the European presidency in July. No doubt the Taoiseach will have picked his brain about how the Nordic country bailed out its banks in the early 1990s without digging into the pockets of taxpayers. The Swedish rescue appears to be something of a blueprint for any government looking at how to fix a banking system – so, in other words, most governments.

  All eyes are on Cowen and Minister for Finance Brian Lenihan on whether they will create a good bank/bad bank system, just like Sweden did, or follow the UK creating some sort of insurance scheme for the toxic loans. We hear that a decision from the Government on the final billion in the €3 billion recapitalisation each for Allied Irish Banks and Bank of Ireland could happen very soon. No doubt Cowen will have picked up the negative vibe in Davos and move more quickly. (more…)

• McCreevy warns that fixing banking supervision will not solve crisis

  January 29, 2009 @ 2:02 pm | by Simon Carswell

  Despite the flak being taken by banking regulators over the global financial mess – 51 per cent of delegates in a survey yesterday at the World Economic Forum in Davos blamed poor supervision of the financial sector – Ireland’s EU Commissioner Charlie McCreevy has said in interviews in the Swiss resort this morning that fixing regulation alone won’t solve the crisis. He said that the banking meltdown has shown the need for a pan-European monitoring of banks with cross-border businesses, but said that member states were still opposing this and that it was a “very vexed” issue. (more…)

• How George Soros would save the financial world…

  January 28, 2009 @ 2:49 pm | by Simon Carswell

  Financier George Soros, the man best known for breaking the Bank of England by betting against the pound in 1992, told reporters at the World Economic Forum in Davos this lunchtime that there was “very serious trouble brewing in the peripheral countries” and particularly the new members in the European Union where more than half their household debt is in foreign currencies, mainly Swiss francs. “That is a problem that urgently needs atttention,” said Soros. (more…)

• Senior Irish bankers are a no-show at Davos

  @ 2:14 pm | by Simon Carswell

  Bank of Ireland chief executive Brian Goggin, who was due to attend the five-day World Economic Forum in Davos, has decided not to travel to the Swiss Alpine village. Allied Irish Banks chairman Dermot Gleeson, who had planned to travel as well, is not coming either. So says the banks’ respective spokespeople. Clearly, both men have more important things on their mind what with the Government’s recapitalisation of both banks, about which talks are continuing with the Department of Finance. (more…)

• Swiss think-in starts on a predictably pessimistic note

  @ 9:00 am | by Simon Carswell

  The World Economic Forum’s 2009 annual meeting in Davos began on a typically bearish note this morning as the first sessions kicked off.

  Stephen Roach, chairman of Asian operations at US investment bank Morgan Stanley, said that 2009 would be the first year since the end of the Second World War when the world’s economy (GDP) would contract. (more…)

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