All posts in Business News

03 Jul 2014

BoI bans trade with Cuba after US ruling

The Irish Independent has seen correspondence from the lender written to long-standing customers with legitimate business interests in Cuba telling them it can no longer process international transactions to or from the Caribbean island.

The ban comes as French bank BNP Paribas was hit with a $9bn (€6.5bn) fine by the US amid allegations it violated US sanctions involving Cuba, Iran and Sudan.

Bank of Ireland has a tie-up with a leading bank in the US which handles all of Bank of Ireland’s transactions under new European payment rules known as the Single Euro Payments Area (SEPA)

The US lender is bound by US regulations which ban payments being made to Cuba, Iran and Sudan, Bank of Ireland said.

Bank of Ireland confirmed that it had written to affected customers who are doing business with Cuba explaining that it could not process payments on their behalf.

“Our correspondent bank for all SEPA transaction is a leading US bank who must comply with its own regulatory requirements and obligations and to avoid a possible exposure to regulatory sanctions and penalties,” Bank of Ireland said in a statement.

“As a result of the decision by our correspondent bank, we are not in a position to process such transactions.

“This affects all international payments to or 
 from Cuba and also any related 
SEPA payments.”

The US government has sanctions in place against a select number of countries including Cuba, Iran and Sudan. The EU has also had sanctions in place against Iran and Sudan but not Cuba.

AIB declined to comment when asked by the Irish Independent if it was facing similar problems concerning Cuba.

03 Jul 2014

Diverting from planned road map to cut deficit has risks

According to opinion polls, there is even a gender distinction of this kind in attitudes to fiscal policy – which, of course, is what we are talking about.

Having once put the car in a ditch while taking the scenic route, perhaps I am biased towards the side of caution in such matters as well.

The one thing we can all agree upon is that, when Michael Noonan finishes his budget speech in October, the planned deficit for 2015 will be just under 3pc of GDP. The argument is mainly over which route to take to achieve that outcome, but it would be wrong to think that is all that is involved.

Some people think it is the wrong destination. Few analysts now argue that a €2bn correction is definitely needed in the Budget to achieve that magic number – but many think it would still be a good idea, in case things take a turn for the worse. Besides, they say, 3pc is no more than a magic number.

Selecting magic numbers is an old pattern in Irish fiscal policy; one which was responsible for much of the destruction of the public finances during the boom. If results were ahead of the target, policy was loosened so as to return to the original figure the following year. The result, after five years of a bubble, was an enormous deficit representing five years of slavishly following pre-determined, wildly inadequate fical balances.

03 Jul 2014

Top Central Bank economist calls for 1c and 2c coins to be dumped

Speaking to the Herald, 
Ronnie O’Toole, economist with the National Payments Plan (NPP) in the Central Bank of Ireland, said the recent 
Wexford rounding trial should be rolled out nationally.


The results of the 
trial last year showed strong support for 
getting rid of the coins.

During the 
experiment, retailers rounded cash transactions to the nearest 5c at the cash register, removing the need for 1c and 2c coins.

According to Mr O’Toole, the 85pc of customers and 100pc of retailers said the removal of the coins should be extended to the rest of the country.

One concern consumers had was retailers would round up the price of goods, but a mystery shopping exercise found it had no inflationary effect.

25 Jun 2014

Nevin Institute: Reduce Budget adjustments to €800m but no tax cuts

The planned €2bn in tax hikes and spending cuts would prolong austerity and do unnecessary damage to the economy, the trade union funded body said at the launch of its latest economic commentary.

Finance Minister Michael Noonan has already said that he believes reducing the deficit to below 3pc of the value of the economy can be achieved by doing less.

This is despite the advice of the International Monetary Fund, the European Commission and the Fiscal Advisory Council, the State’s budgetary watchdog.

But NERI also warned that there wasn’t any room for tax cuts as this would harm public services.

“Some of the tax cuts that we’ve heard about is concerning,” said Dr Tom McDonnell of the institute.

“For example, changing the threshold on the marginal rate of income tax. That would only affect a small proportion of households, and of course those are the higher income households. Obviously that would be inequitable but it would also not be particularly effective in boosting demand.

25 Jun 2014

Anger as PTSB ‘cashes in’ by selling off over 2,000 mortgages

The state-owned bank said it was ready to sell €2.6bn of “non-core” loans including the old Springboard Irish subprime mortgages and has appointed advisers Morgan Stanley to find a buyer or buyers.

Improving market conditions mean the bank – once the country’s largest mortgage lender – sees a chance to off-load loans it no longer regards as “core” to its future business.

But campaigner David Hall’s Irish Mortgage Holders’ Organisation (IMHO) said the action is being taken despite the unfulfilled promise by the Department of Finance to bring in new laws to protect consumers when mortgages were sold.

“This is a cynical exercise by PTSB/Springboard and takes advantage of the ‘heads up’ given by the Finance Department that legislation is supposedly on the way. But where is it?” asked Mr Hall, IMHO director.

“The announcement of the intention to bring in consumer protection legislation has created a flurry of activity, as now announced by PTSB, to sell mortgages ahead of the new laws being enacted,” he said.

25 Jun 2014

House prices continue to grow but rise in capital double that of national average

THERE has been another strong rise in property prices. They rose by 10.6pc in May when compared with a year previously, the Central Statistics Office said today.

In the month of May, prices nationally were up 2.3pc.

But the surge in prices in the capital was double the national average.

Prices jumped by 22pc in Dublin compared with a year ago, after a rise of 4.2pc in the month.

Outside of Dublin prices were up 1.8pc compared with a year ago, and up 0.6pc in the month.

Prices over the entire country are still down 45pc from their peak in 2007, the Central Statistics Office said.

25 Jun 2014

IMF demands tax hikes, spending cuts ‘to protect hard won gains’

The Washington-based lender said the Government should stick with the planned adjustment to protect “hard won gains” rather than simply aim to meet next year’s crucial EU deficit target

The call for another austerity budget was also made by the Fiscal Advisory Council earlier this week, while the European Commission said last week that it wants more than the €2bn in cuts and tax hikes.

In its first post-bailout review, the IMF said the Irish economy is beginning its recovery from crisis but stressed determined efforts were “vital to sustain growth”.

20 Jun 2014

Central Bank fails to find replacement for chief economist

Mr Frisell left the Central Bank in March to take up a job with the International Monetary Fund’s Africa training institute in Mauritius.

His post was advertised globally after his resignation was announced in November, with the closing date for applications in early December.

A spokeswoman for the Central Bank confirmed that the top job has still not been filled. The process remains open and deputy governor Stefan Gerlach has assumed Mr Frisell’s responsibilities while the process continues, she said. However, it is understood an appointment is not imminent.

Mr Frisell’s resignation was the latest in a series of high-profile departures after former financial regulator Matthew Elderfield left early last year to take up a post with Lloyds Bank in London. Fiona Muldoon, who was the bank’s No 3 and director of credit institutions and insurance, also announced in November that she was leaving.

20 Jun 2014

Taxpayers will not lose money on the bailout of AIB – bank chief

The cash can be repaid, he said, with significant amounts potentially coming back to taxpayers in the next few years,

“(It is) definitely a realist prospect, I think we can make substantial re payments in the years to come,” David Hodgkinson said.

It’s the most optimistic any senior official has been about the prospects for making a recovery on the €20.8bn rescue of the bank.

The State is already in profit on the rescue of Bank of Ireland.

17 Jun 2014

Rate of entrepreneur activity highest since economic crisis – report

The annual GEM report also showed that 85pc of businesses surveyed expected to create jobs.

In addition, those who indicated that they are planning to start a small business in the next three years also increased significantly in 2013.

The report, which measures entrepreneurial activity, and is backed by Enterprise Ireland, Forfas the Department of Enterprise, also showed a narrowing of the gender gap.

There are now 1.4 times as many man as women who are business owners.

The report also showed that one in 10 are still having problems finding finance to keep their businesses going while informal investors continue to be a viital source of funding for small businesses.