Ireland

Europe’s financial centre is splitting up, possibly for the better. Dublin has gained a lot of new business from London’s exodus, becoming the top choice of firms seeking higher ground post-Brexit, The Irish Times reported. Now Ireland must decide whether it wants to be a leader or a counterweight in Europe’s financial future. With the departure of the UK as the financial industry’s primary voice, the EU will have a chance to redefine how it approaches its banking and capital markets.

Ratings agency DBRS believes there is a low risk that the borrowers of the €290 million worth of mortgages being sold by lender Finance Ireland will default, The Irish Times reported. Finance Ireland said this week that it intends offering almost 1,400 home loans on which the borrowers owe €290 million for sale in bonds known as residential-mortgage-backed securities. DBRS Ratings, which assesses businesses’ ability to pay their debts, has given the Finance Ireland bonds ratings of between BB and AAA, meaning that it believes there is a low risk of the borrowers defaulting.

The risks to Ireland from a no-deal Brexit were outlined in stark terms as a top official warned that the country’s high debts had left it vulnerable to shock, the Financial Times reported.

Ireland faces 85,000 potential job losses and a sharp economic slowdown if the UK crashes out of the EU in October, the country’s finance minister has said, in a stark warning about the effect of a no-deal Brexit, the Financial Times reported. Paschal Donohoe said 50,000 to 55,000 jobs could be lost within two years of the UK exiting the EU without a deal, with another 30,000 at risk in the medium term if there were no resolution to political chaos in Westminster over Britain’s departure from the bloc.

Some €875 million – or 7.3 per cent – of all performing loans to small and medium businesses have a “high vulnerability” suggesting their ability to repay in the event of a downturn would be threatened, according to Central Bank research, the Irish Times reported. The research, conducted across three banks in the Republic (AIB, Bank of Ireland and Ulster), found that there is more than €12 billion in outstanding loans to SMEs.

The chairman of the largest Irish estate agency has said it is time to “shout stop” about the Central Bank’s mortgage lending restrictions and has called on the regulator to relax its rules to release “the genius of capitalism”, the Irish Times reported. Mark FitzGerald, the chairman of Sherry FitzGerald, said the Central Bank’s macroprudential rules, which cap new mortgages according to loan-to-value and loan-to-income limits, are “too binding”.

Over €39.82 million remains unpaid to the Revenue Commissioners in taxes, penalties and interest from tax defaulters who were named last year and in 2017, the Irish Times reported. Figures provided by Minister for Finance Paschal Donohoe show that €15.5 million remains unpaid by published tax defaulters in tax, penalties and interest from 2018. In a written Dáil reply to Joan Burton TD, Mr Donohoe confirmed that a further €24.2 million remains unpaid in taxes, penalties and interest from the 2017 lists of published tax defaulters.

The Central Bank will be able to fine and disqualify senior bankers for failings under their watch without first proving wrongdoing by their employers under planned new laws being drawn up in the wake of the tracker-mortgage scandal, The Irish Times reported. More than a decade after the financial crash and three years after Britain introduced a senior manager regime, Minister for Finance Paschal Donohoe received the go-ahead from Cabinet on Tuesday to push through similar measures in the Republic. It is expected to come into force from next year.

The Government’s medium-term projections for the public finances are “not credible”, the State’s fiscal watchdog has said in its latest assessment of the economy, The Irish Times reported. The Irish Fiscal Advisory Council (IFAC) said the projections – laid out in the Stability Programme Update 2019 – show exchequer surpluses increasing each year based on expenditure forecasts that were not probable.

The National Asset Management Agency (Nama) is resisting calls from the Oireachtas Public Accounts Committee (PAC) to verify that debtors in default are not involved in the illegal purchase of assets of the so-called bad bank, The Irish Times reported. Minister for Finance and Public Expenditure and Reform Paschal Donohoe has been informed by Nama that meeting this recommendation, contained in a PAC report in March, “would give rise to a series of practical difficulties which could have an adverse commercial impact on its sales activities”.