The Department of Finance has advertised for people interested in being nominated or appointed to the boards of banks as part of the clear-out process, the Irish Times reported. The department is creating a pool of potential directors after Minister for Finance Michael Noonan announced plans last week to clear out the boards of the banks of the directors who were in place before the banking crisis. This process “should ensure a high-calibre field from which directors may be chosen and makes the process more open and transparent”, the department said.
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Ireland
The lenders to the Quinn Group will receive interest payments of about €100 million a year under the restructuring deal where they have taken control of the business from Seán Quinn with Anglo Irish Bank, the Irish Times reported. Banks and bondholders are owed €1.28 billion by the group, while State-owned Anglo is owed €2.88 billion by Quinn and his family.
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Seán Quinn and his family will no longer have a role in the management or ownership of the Quinn Group after Anglo Irish Bank appointed a share receiver to take control of the family’s stake in the business, InsolvencyJournal.ie reported. Anglo Irish Bank is owed €2.8 billion by Seán Quinn and his family, while other lenders to the Quinn Group are owed almost €1.3 billion. Anglo Irish Bank chief executive Mike Aynsley said that the bank was owed an enormous amount of money by the Quinn family, of which there was little prospect of recovery.
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Lower credit standards, the introduction of high-risk products and access to credit on international money markets contributed to the Irish banking crisis, a new report found today, the Irish Times reported. The Nyberg report says while international developments helped trigger the crisis in Ireland, they did not cause it, and its origins were the result of "domestic Irish decisions and actions, some of which were made more profitable or possible by international developments".
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Seán Quinn has blamed over-reliance on the banks and their economic predictions for the group’s problems, the Irish Times reported. Mr Quinn yesterday issued his first statement since he lost control of his manufacturing and insurance business, Quinn Group, to a receiver last week. Anglo Irish Bank has since appointed Kieran Wallace of KPMG as share receiver to Quinn Group ROI Ltd last Thursday. The group owes €2.88 billion to the bank.
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Ireland’s Supreme Court last week ruled that the legislation governing the National Asset Management Agency was constitutional. In the appeal to the Supreme Court, developer Paddy McKillen challenged the legislation underpinning the state body. The court did not agree that the definition of eligible bank loans in the NAMA legislation was too broad and was unconstitutional, InsolvencyJournal.ie reported. Despite losing his appeal on the issue of the Constitutionality of the 2009 Act, Mr. McKillan did succeed on the issue of fair procedures.
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Europe's struggling periphery is bracing for another blow to its already grim economic growth prospects, this time from the soaring euro, which touched a 15-month high against the dollar on Wednesday, The Wall Street Journal reported. The euro's rise, which makes products from the single-currency zone more expensive in global markets, will affect exporters throughout the 17-member currency bloc—particularly with global trade set to slow dramatically this year. The euro is almost 10% higher against the U.S. dollar since the start of the year, and 4% higher against the British pound.
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In a dramatic illustration of the upheavals in Ireland following the crash of the Celtic Tiger, the nationalised Anglo Irish Bank announced Thursday that it had seized control of the Quinn Group from ex-billionaire Seán Quinn and his family, Finfacts reported. Seán Quinn, Ireland's once richest man, built up a conglomerate originally from quarrying and later he moved into cement and glass production.
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AIB would consider writing off debts for some mortgage holders who cannot repay loans as a long-term way of resolving problem cases, the bank’s executive chairman David Hodgkinson said. Debt forgiveness was one option being considered, the bank said, as it posted a record loss of €10.4 billion for 2010 and unveiled plans to shed more than 2,000 staff – one in seven jobs at the bank, the Irish Times reported. Mr Hodgkinson said there was a range of possibilities for distressed borrowers, including a reduction on repayments by extending a loan period or writing off some debt.
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The woes of Irish banks, unlike those at peer institutions elsewhere in Europe's suffering periphery, are not a concern merely for the banks' own solvency. They are a national solvency problem, too—or at least they became one when the government decided to insure bank creditors in September 2008, The Wall Street Journal reported in a commentary. It is this, more serious aspect of the Irish crisis that remains unaddressed in the government's new bailout plans. Ireland's public debt is clearly unsustainable.
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