Inside the world of business
Finance puts its own man in IBRC to lead run-down
THE INSTALLATION of banker turned mandarin Neil Ryan at Irish Bank Resolution Corporation raises a number questions, the most pertinent being: why?
Ryan, who is being seconded from his key assistant secretary role at the Department of Finance, will take responsibility for market solutions at the bank. Its primary function is to “facilitate the deleveraging of the bank’s loan portfolio in the most efficient time frame”.
It is a key part of the plan to close the book on Anglo Irish Bank and Irish Nationwide; the decision by the Department of Finance to install its own man in the post is hardly a ringing endorsement of progress to date.
Presumably it reflects tensions between the Department and the bank management over the speed at which things are being run down.
IBRC management, led by Mike Aynsley, are advocates of the “slowly, slowly, catchy monkey” school, arguing that they will get more money back in the long run by continuing to bank and stay close to former Anglo Irish clients.
However, the bank’s ongoing relationship with some clients has proven controversial.
Aynsley’s endorsement of Paddy McKillen’s unsuccessful attempts to overturn the National Asset Management Agency sale of debts on his London Hotels to the Barclay brothers did not play well. His text messages to McKillen – revealed in court – were particularly embarrassing.
IBRC’s enthusiasm for maintaining its banking relationship with Denis O’Brien – once its biggest debtor – also does not fit with the notion that the bank is being run down. The bank has been accused of giving favourable treatment to O’Brien, leaving management open to the accusation that they harbour ambitions for the bank other than the quickest possible run-down.
As a member of the bank’s group executive committee, Ryan will be in a position to judge all this for himself.
Department seeks to lift the 'Fog' surrounding end of analogue TV
THE FOG is a 15-minute play by Mayo writer John Corless that revolves around “an entertaining exchange between a couple in a living room in a home in rural Ireland on Thursday 25th, October 2012”, according to a press release from the office of Pat Rabbitte, Minister for Communications.
What’s so significant about October 25th? It is the day after the switch-off of analogue television signals in Ireland and across Europe. The play, which will be performed in a number of community centres in Mayo and beyond, concentrates on that moment “when the husband realises to his dismay that he has no picture on his beloved TV”.
The idea of The Fog, and the Department of Communications’ digital switchover campaign in general, is for some 250,000 homes in Ireland in the core target group – those relying on an analogue signal – to take steps to upgrade now, rather than later.
This is a completely separate endeavour from RTÉ’s Saorview campaign, which aims to sign people up to the free-to-air digital terrestrial television service of the same name.
The department’s campaign, on the other hand, is strictly platform-neutral – there is no mention of Saorview in its announcement of the highlights of next week’s National Digital Switchover Week. It’s just one of the options.
Consumers will be familiar with the others. Sky, in particular, has been making merry with digital switchover, using it as a marketing hook to successfully add subscribers. Unlike Saorview and the department, Sky does not have outreach partners, but it does have a substantial sales team.
In his address to the TV50 conference at University College Cork on Saturday, Rabbitte referenced the “quality programming” offered by Sky Atlantic. However Sky’s ability to buy up content isn’t its only activity that’s worrying the Irish broadcast sector.
BSkyB is one of the organisations noted by Rabbitte that possesses larger economies of scale than RTÉ can ever hope to achieve.
“These organisations can spend far more on content, on advertising and on platforms than any indigenous broadcaster,” the Minister pointed out. The word “platforms” is not included in there by accident.
For Irish broadcasters battling the collective might of competitors old and new, there is much digital fog to wade through before the skies clear.
German currency exit would be' good' for Irish property market
THE VIEW expressed by retired currency speculator and europhile George Soros that Germany should either provide leadership in the euro crisis or leave the currency, reported yesterday in the Financial Times, is also the subject of a lengthy piece by him in the most recent edition of the New York Review of Books.
His view is that a crucial moment in the crisis came when Angela Merkel declared, in the wake of the collapse of Lehman Bros, that the guarantee that no other systemically important financial institution would be allowed to fail should be given by each country acting separately and not by the European Union acting jointly. That was the first step in a process of disintegration that now threatens to destroy the EU, according to Soros.
Seen in this way, the view expressed to the late Brian Lenihan that, for the good of the European system, Anglo Irish Bank should not be allowed to fail, was a local expression of a decisive – and arguably disastrous – policy decision.
Soros believes Germany is more likely to lead rather than leave the euro, because of the costs that it would face were it to leave. (Money owed to it from debtor countries would be repaid in euros, which would depreciate relative to the new German currency.)
If agreement to solve the euro crisis cannot be achieved, then it would be better to have an amicable break-up, according to Soros.
He also sees an upside to a German departure for Irish property prices. “With a significant exchange rate differential, Germans would be flocking to buy Spanish and Irish real estate.”
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