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Europe’s money market funds will not have to hold costly capital to shield them from financial shocks following a vote by MEPs to soften proposed new rules for the trillion-euro industry.

The new regulations are designed to ensure stability in money market funds, which are used by companies and investors to park cash for short periods. The funds experienced mass withdrawals when US bank Lehman Brothers collapsed in 2008.

The original proposals would have required more than half the funds in the sector to hold a buffer or capital equivalent to 3% of their assets as a safeguard in market turbulence.

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Economic sentiment in the eurozone rose to a seven-month high and German unemployment dropped, keeping the region on a recovery path as the ECB prepares to unleash its quantitative-easing programme.

An index of executive and consumer confidence climbed to 102.1 in February from a revised 101.4, the European Commission said yesterday, beating the 102 median estimate in a Bloomberg survey.

In Germany, the number of people out of work declined a seasonally adjusted 20,000 to 2.81m, twice as much as predicted.

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The percentage of mortgages in long-term arrears is on the increase with more than €8bn of total arrears falling into this category, new data shows.

Despite the overall decline in the volume of primary-dwelling home arrears, there has been an increasing percentage of loans more than 720 days past their repayment date, according to the Central Bank’s household credit market report published yesterday.

In addition to the €8bn worth of lending in long-term arrears, a further €6.8bn was 180 to 720 days overdue. The value of mortgages in arrears has fallen from peak levels of just over €18.8bn in the third quarter of 2013 to €16.6bn representing more than 15% of the outstanding stock of loans.

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The Central Bank’s new deposit and loan-to-income rules will not affect house prices or supply when demand is based on fundamentals, but they will have a significant impact on speculative demand, according to Central Bank economist Lars Frisell.

“If the housing market has become speculative, where credit and house prices grow partly based on expectations of further house price increases, the rules will have a significant effect.

“The reason is that, at that stage, buyers’ incomes will neither pass the loan-to-income rule, nor will they support sufficient savings to accumulate future deposits,” said Mr Frisell, speaking at the Irish Economy conference in Dublin yesterday.

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Pressure on Ireland to cut its deficit and debt will continue despite the country hitting its targets as prescribed by the European Commission.

There is some controversy over France getting an extra two years to meet its 3% deficit target despite having failed to fulfil its targets.

Instead they have been told to make a structural effort of 0.5% of GDP this year.

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Corporate Ireland is on the march. With strong financial performances attained during 2014 companies have the resources and appetite to expand their operations globally.

Corporate Ireland is on the march. With strong financial performances attained during 2014, and equipped with solid balance sheets and access to inexpensive debt, companies have the resources and appetite to expand their operations globally. This sets the stage for a period of acquisition led development.

Industrial companies in Ireland are reporting their 2014 results currently and, in general, these are robust and encouraging.

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Almost a quarter of the 145 hotels put into receivership at the end of last year are yet to come to market creating a pipeline of properties that will help transactions reach record highs again this year.

The large number of buyers coupled with improving economic fortunes and a strong supply line of hotels is likely to see transactions reaching peak-2014 levels when 68 hotels were sold.

With Ulster Bank, Nama and IBRC set to continue feeding demand in the sector and large buyers with acquisition funds in place, further consolidation is likely.

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There was a 42% fall in the number of complaints received by the Financial Services Ombudsman in 2014, according to its annual review.

There were 4,477 complaints made and 3,166 of these were closed by way of a formal investigation.

Some 45% of complaints closed during the year involved some form of redress for the customer.

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The long-term sustainability of the tourism sector is being compromised by a lack of State investment, the hotels federation annual conference has heard.

Cutbacks have taken €25m from the coffers of the State’s tourism bodies, Fáilte Ireland and Tourism Ireland, since 2012 — a development that is putting long-term growth at risk.

Irish Hotels Federation (IHF) president Stephen McNally told more than 300 assembled delegates at the annual conference in the Slieve Russell Hotel in Co Cavan that the time has come to reverse the cuts made during the recession.

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The UK economy will suffer in the run up to a referendum on Britain’s EU membership and this will have a knock-on effect on Ireland, a UCD economist has predicted.

Joe Durkan, who lecturers in economics at the university, also warned that Britain would be side-lined in global trade talks, and the City of London, the UK’s financial heart, will also lose influence.

A senior Conservative MP has already warned that Prime Minister David Cameron’s pledge to hold the vote is already costing the country investment.

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