Ireland

European Central Bank President Mario Draghi said "considerable progress" has been made in mending Ireland's banks but more needs to be done to ensure the stability of the country's financial system, The Wall Street Journal reported. The "outstanding issues" include completing the restructure of damaged banks, dealing with "the still very large stock" of soured loans and "ensuring the viability of all nationalized banks," Mr. Draghi wrote in a March 20 letter he sent in reply to correspondence from Fianna Fáil, Ireland's largest opposition party. The party released the letter Monday.

Global ratings agency Moody’s says the outlook for Irish banks remains negative because of the “extremely high level” of problem loans, the Irish Times reported. In a report published yesterday, Moody’s Investors Service noted poor performing loans accounted for nearly 30 per cent of the rated banks’ total loans. Ongoing asset-quality problems exposed Irish lenders to further valuation adjustments, it warned, despite growing signs of recovery in the wider economy. On the upside, the agency predicted new loan impairments were likely to continue to decrease and profitability improve.

Merrill Lynch told the government in 2008 the cost of bailing out the banks would only be a quarter of the €64 billion it eventually cost the taxpayer, the Irish Times reported. The information has been disclosed by Department of Finance documents released to Sinn Féin finance spokesman Pearse Doherty in recent days. In a 45-page presentation to the Department of Finance on November 18th, 2008, Merrill Lynch estimated it would cost some €16.4 billion to fund a State rescue of the banks.

A group involved in brokering deals between banks and distressed mortgage holders has reported a sharp increase in activity, the Irish Times reported. The Irish Mortgage Holders’ Organisation (IMHO) said it had recently negotiated 97 deals involving customers of Allied Irish Banks that included some form of debt write-down. In one case, involving a couple in Cork, the bank had written off €195,000 in mortgage debt while allowing the couple and their two children to remain in the house. The deal is believed to be one of the largest mortgage write-downs agreed by the State-owned bank.

The Chartered Accountants Regulatory Board has been asked to formally investigate the conduct of KPMG as auditors of Irish Nationwide Building Society, whose collapse cost the State €5.4 billion, the Irish Times reported. Sinn Féin finance spokesman Pearse Doherty has written to Carb to ask it to examine audit reports, prepared for the failed building society by KPMG in the financial years 2006 until 2009, under seven different headings.

The lack of competition in Ireland’s post-crash banking sector may be a key reason why firms are finding it so difficult to access credit, the Irish Times reported. New research by the Economic and Social Research Institute (ESRI) suggests a direct link between bank market competition and access to finance by small- and medium-sized enterprises. The study – entitled Does Bank Market Power Affect SME Financing Constraints? – assessed the financial constraints faced by 118,000 SMEs in 20 European countries between 2005 and 2008.

A liquidator has been appointed to the firm behind Irish Psychics Live, which was founded by former journalist Tom Higgins, the Irish Times reported. A document lodged with the Companies Office confirms that Eamon Leahy of Leahy & Company, Fairview, Dublin has been appointed as liquidator arising from a resolution of the members of Realm Communications Limited. The liquidation of the firm follows eight months after the company, which was behind what was Ireland’s most high profile and controversial premium phone line service, ceased trading.

Non-performing loans are likely to have plateaued at Ireland’s two largest banks ahead of the ECB’s comprehensive review, according to Fitch Ratings. The ratings agency said their latest annual results incorporate some of the observations from the Central Bank of Ireland’s recent balance sheet assessment on loan impairment provisions and risk-weighted assets, leaving them better positioned for the ECB review and well placed to return to sustainable profitability.

NAMA has so far placed 296 individual developers or groups of developers into receivership, the Irish Independent can reveal. Based on figures provided, since its inception in 2009 the National Asset Management Agency has moved against 37pc of the developers it has dealt with, including high-profile ones such as Sean Dunne, Paddy Shovlin, Bernard McNamara, Richard Barrett and Johnny Ronan of Treasury Holdings. But last night, Fianna Fail finance spokesman Michael McGrath said he was "highly concerned" at the high number of developers who have been moved against.

It’s just over two months since Jose Manuel Barroso stoked controversy when he said that the euro was a victim of the Irish banking crisis at a leaders’ summit in Brussels, just as Ireland had exited its bailout. This evening he will have the first opportunity to return to the topic of Ireland when he addresses an audience at University College Cork, the Irish Times reported.