Anglo culture is still with us
TALES OF a bankrupt Seánie Fitz roughing it in Poznan last week, having to make do with a €550 a night hotel, where fellow revellers included PJ Mara and President Michael D Higgins (presumably the campsites were full), have reignited many people’s feelings about the Anglo culture that still pervades.
Today we’ll get another reminder of the bank we all love to hate.
Bank of Ireland is holding an extraordinary general court in Dún Laoghaire this morning to approve its role in the purchase of a government bond from Irish Bank Resolution Corporation, Anglo’s new name, to delay the State’s €3.1 billion annual cash payout due on the defunct lender’s promissory notes.
This scheme was concocted back in March, and was completed on a temporary basis with the National Asset Management Agency stepping in and buying the bond, but the plan was that Bank of Ireland would then buy that bond from the State agency.
However, although the bank’s board conditionally approved this deal, the imprimatur of its shareholders is still required.
In its circular to shareholders Bank of Ireland emphasised the benefit to the State of such a deal, but that’s hardly likely to tug at the heartstrings of its North American institutional investors.
More persuasive is the €38.7 million in fees which the bank estimates it will earn on the transaction, but whether it will be enough of a carrot to convince them to tick the yes box remains to be seen.
No limit for Bloxham partners' debts
“UNLIMITED LIABILITY”. How those words must be sticking in the craws of Bloxham’s seven individual partners.
They invested in the stockbroking firm through unlimited companies, with the result that they (unlike the canny Mick Wallace, who made sure that he and his building firm were separate legal entities) are personally on the hook for all the debts of their now defunct business.
So, not only have they lost their livelihoods, but reports estimate that they are looking at a bill of some €30 million.
This could rise further depending on the outcome of a court case due to kick off in the High Court in London today.
The action is being taken by understandably disgruntled investors in the disastrous
Saturn investment bond, which destroyed 97 per cent of their capital.
Now Bloxham, together with US bank Morgan Stanley which provided the bond, is being sued for €20.5 million in claims from these investors. Talk about being kicked when you’re down.
The firm’s eighth partner, insurance company FBD, may
not like having its name dragged into the mess that now is Bloxham, but it must be thanking its lucky stars for its status as the only limited partner in the business.
Printing presses set to roll
ON THIS side of the Atlantic we often accuse those in the US of having an insular attitude and failing to take much interest in events occurring outside their own borders.
However, because of the car-crash economics playing out in the single currency area, it’s hard to drag our eyes away from Europe’s rapidly escalating crisis and consider the problems rearing their heads again Stateside.
But while the Grexit (Greece exiting the euro zone) possibility will dominate coverage this week, watch out too for a QE3 announcement.
In light of the weakness of US jobs data for April and May, speculation has grown that the Federal Reserve will get the Treasury to start printing money. Again.
On Wednesday, the Fed is expected by many to announce a third round of quantitative easing, whereby freshly-minted cash is used to buy government debt in an effort to drive down interest rates and support the economy.
The QE3 naysayers warn that too much central bank stimulus could fuel inflation, but the fear of hyperinflation appears not to be as pronounced in the US as Europe, and looks unlikely to hold back Fed chief Ben Bernanke.