Ireland's economic well-being may not be as rosy now as it was this time last year - but things could have been a lot worse were it not for the caution of our financial controllers. When the Minister for Finance, Charlie McCreevy, put aside €7 billion for future pensions he asked the National Treasury Management Agency to manage it. Advertisements were placed internationally for investors and at least one-third of the sum would have gone into equities. The process took a long time, as there were more than 600 applications from 200 investment managers anxious for a piece of the action. In the interim, the billions were left sitting in government bonds where they earned a low interest but were exposed to no risk.
Luckily for us, the money was still so parked when the attacks on the US occurred on September 11th. Had the money been placed abroad, it would have lost about one- third of its value - almost €2.5 billion. Indeed, pension funds worldwide lost huge sums of money. With this in mind, the British have changed liquidity requirements so companies can survive such shocks. If our pension fund had been up and running on September 11th the Government would have been in trouble.