Ireland

Defaults among Irish mortgage holders more than doubled over the course of last year and were still growing in December, according to the latest analysis from Moody’s, the Irish Times reported. The ratings agency found that 1.65 per cent of the residential mortgages it studied had not been repaid for 360 days or more in December, up from 1.62 per cent in November. This compared to 0.7 per cent a year earlier, marking growth of almost 140 per cent over the course of 2010.

Euro zone finance ministers have eliminated the prospect of any move to impose losses on senior bondholders in Ireland’s banks, economics commissioner Olli Rehn said, the Irish Times reported. Although Fine Gael and Labour each say they would compel the highest-ranked bank bondholders to bear “haircuts” on their investment if they won the election, the commissioner said Ireland’s European sponsors see no possibility to pursue that path.

Anglo Irish Bank has told David Drumm’s bankruptcy proceedings in the US that it intends to sue him for his role in the treatment of Seán FitzPatrick’s loans and other controversial matters at the bank, the Irish Times reported. The bank has said it is going to pursue a claim for breach of fiduciary duty against its former chief executive arising from alleged misconduct and deception.

Growing uncertainty over State banking policy and a greater chance that burden-sharing will be forced on bondholders have led Moody’s to downgrade the senior unsecured debt of the six domestic banks, the Irish Times reported. The rating agency said the move had stemmed from “statements from both the leading Opposition party and the incumbent finance minister”. The existing “supportive” policy in relation to Irish banks has been called into question, Moody’s said.

Barely two months old, Ireland's €67.5 billion ($91.76 billion) deal for an international bailout is showing signs of strain, and the party expected to take power in this month's elections is maneuvering to renegotiate its terms, The Wall Street Journal reported. European finance ministers meeting in Brussels this coming week are expected to discuss how the plan could be modified amid Irish concern that it is too burdensome. Ireland has griped about the interest rate and the fact that taxpayers are bearing the brunt of the losses of the Irish banks.

A third rate of income tax, a wealth tax on assets worth over €1 million, restructuring bank debts and capping the salaries of TDs and ministers are among the proposals in the Sinn Féin election manifesto launched in Dublin yesterday, the Irish Times reported. Launching the 40-page bilingual document, There is a Better Way – Tá Bealach Níos Fearr Ann, Sinn Féin leader Gerry Adams told a news conference that it aimed to create “an Ireland of equals”.

The man likely to be Ireland's next prime minister said the government should wait until a round of stress tests on the country's banks has been completed before recapitalizing them, expressing concern that they may still have a "black hole" on their balance sheets, The Wall Street Journal reported. In an interview, Enda Kenny said it would be "prudent and realistic" to wait until the stress tests had been completed "to see if there is another black hole in the banks" before they receive any new capital injections. Mr.

Permanent TSB’S decision to introduce immediate increases of between 2 and 3 per cent on its fixed interest rates for existing mortgage holders rolling off fixed or discounted rates has been described as “shocking”, the Irish Times reported. The bank announced last night it was increasing its two-year fixed term rate from 5.25 per cent to 7.25 per cent while the five-year fixed rate will go from 5.75 per cent to 8.75 per cent. A 10-year fixed rate will increase from 6.1 per cent to 9.1 per cent.

A report from Goodbody Stockbrokers has argued that the State cannot bear the losses from the banking crisis on its own, RTE News reported. In a report on Irish debt levels, Goodbody says there should be some form of risk-sharing with bondholders. But it adds that Ireland cannot do this on its own, and should push for a Europe-wide solution to the problem. Goodbody says some €21 billion of bank debt should be restructured now - otherwise there will have to be a restructuring of Irish sovereign debt some time after 2014.

Anglo Irish Bank, the reckless institution at the heart of Ireland's slide towards bankruptcy, has reported a preliminary euro17.6 billion ($24 billion) loss for 2010 - by far the worst in Irish corporate history, the Associated Press reported. State-owned Anglo revealed the staggering figure Tuesday after the Dublin High Court approved a government plan to merge Anglo with another bust bank, Irish Nationwide, within weeks. The court order permits both banks to auction off their surviving deposit bases to solvent Irish banks.