Irish banks far from poverty stricken

At ground-floor level there's a lot of things to distract you - like looking out of the window and noticing that there's moss…

At ground-floor level there's a lot of things to distract you - like looking out of the window and noticing that there's moss growing between the paving slabs on the patio and that the garden seat could do with a lick of paint.

Not to mention the fact that there's a small cloud of feathers midway down the lawn and the cat is going round with a self-satisfied smirk on his face.

These things were of much greater immediate interest to me last week than Alan Greenspan having a go at the markets again because they were staring me in the face. But the reaction to Mr Greenspan's report to congress is becoming a little in-your-face too as equity markets showed us this week.

The general consensus now is that rates in the US will continue to climb until the economy slows down although with the economy remaining as buoyant as ever there's no sign of that just yet. Productivity continues to increase which should be good but right now is causing more headaches.

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Greenspan, like the rest of us, is struggling with old thinking and new paradigms.

Just like the banks. It was almost impossible to pick up a newspaper last week without seeing a discourse on the troubled waters for the Irish banks. If it isn't DIRT liabilities it is investor dissatisfaction with their Internet efforts to date - although, to be fair, any stock without some great new Internet project is languishing off the fund managers' buy lists at the moment. In fact, Ireland Inc is languishing off most of their buy lists because the Republic just isn't a sexy enough story anymore.

Sure, we might like to think of Dublin as the Celtic Barcelona (I was in Barcelona again recently - I'm sorry, we can't compete with mid-teen temperatures in February), but sophisticated night-life isn't enough to make international fund managers buy your shares. And, of course, the Irish managers have been diversifying out of the Republic ever since the euro became an inevitability rather than a pipedream.

Given how heavily weighted they were in bank stocks it's not altogether surprising that these are suffering - although if you buy shares and hold them for the dividend (not something that most get-rich-quick traders want to do) you should be all right. There's no way those banks aren't making profits!

Last month I was owed some sterling and the payment was late so the person paying me suggested that they would transfer the money rather than send a cheque. No problem, I thought, because we were both using the same bank. And, indeed, the transfer went through no problem except that they were charged around £20 to make it while I was charged a whopping £70 to receive it! It would have been cheaper to wait for the cheque. (A lot cheaper, as it turns out because sterling strengthened in the meantime. Never let it be said I can't lose money with the best of them.)

On the other side of the coin, I then had to make a transfer to Spain - that cost around £35 in Irish bank charges and nearly £50 in charges from the Spanish bank. So you can't say that the share prices are suffering because the banks aren't charging enough, no matter how much they might complain that their current accounts lose them money.

But if making money isn't enough for investors, what is? The ability to make even more in the future - and the only way (as far as most investors seem to be concerned) that anyone will make money in the future is by having a huge online presence.

On Monday, Deutsche Bank announced alliances with AOL Europe and SAP to develop and market Net banking services. It's going to provide financing and trading services and target more customers through its Brokerage 24 and online banking services. And, putting its money where its mouth is, Deutsche Bank is also launching two funds to invest in Internet companies in Europe, the US and Asia. It's also co-operating with Mannesmann to create what it describes as a panEuropean tele-commerce bank which they hope will be operational by the end of the year.

I have two bank accounts both of which allow me to do telephone banking - a vast improvement on having to wait for the bank to be open, even if you go insane pressing the buttons on the telephone. Either or both banks might offer online banking but I've never been told about it by them. They might have posters up in the branch, but I never go to the branch because I do everything by phone or by using the ATM machine.

I've been with one of those banks for nearly 20 years and the only post I ever get from them is my statement and the occasional special offer whereby they suggest they can lend me some cash at something like 6 per cent higher than they're paying me on deposit.

In the States, the concern is that the banks themselves continue to fuel the boom in stock markets by lending too much too easily. When they lend, the investors aren't buying the old industrial shares, they're buying future earnings expectations by going for the technology companies.

Deutsche Bank is financing its e-commerce projects through selling its industrial holdings. Just having a website isn't enough anymore and, even if we see a continuation of the shakiness of equity markets due to the prospect of higher interest rates, the technology genie isn't going back into the bottle.

In a classic case of putting your money where your mouth is, Jonathan Maitland, the journalist and TV presenter, has mortgaged his house for £50,000 and hopes to make £1 million by trading on the Internet. Maitland isn't the complete gambler you might think, though. He's keeping a diary of his progress and has sold the rights already for, as they coyly put it, a five-figure sum.

I don't know whether its more five figures or less than the mortgage but I'd be surprised if it wasn't used as a benchmark somewhere along the line. Anyway the book is called (not surprisingly) How to Make a Million from the Internet (and what to do if you don't): The Diary of a Day Trader. For Maitland's sake, I hope the bubble doesn't burst this year.

And, with interest rates on the rise again, I hope he took out a one-year fixed mortgage.