The Government will belatedly introduce rules to force disclosure of shares held through contracts for difference (CFDs) next year – five years later than first planned.
In October 2010, the Department of Finance said it would bring forward rules on the reporting of CFD positions within weeks, in the wake of the collapse of Anglo Irish Bank, where businessman Sean Quinn had secretly built up a 29pc stake using the controversial derivatives.
However, it never happened.
The bank said its results represented a €1.3bn improvement in performance compared with the first half of last year with funding and capital positions stable and improving.
The bank last reported a full-year profit in 2008 as the financial crisis was hitting.
The expected move to profit marks a milestone as it moves towards repaying a state bailout next year- the €20bn cost to the taxpayer was the most given to a bank that is still in operation.
The Central Bank has given the go-ahead for investment funds to start lending to Irish businesses. It could put the funds in direct competition with the banks.
The Central Bank has published a consultation paper on “loan-originating alternative investment funds (AIFs)” including hedge funds. The paper, the bank said, signals its intention to allow such funds to start lending directly to corporates.
Up to now the regulator has banned investment funds from lending directly to companies, but that is now changing thanks to European rules on banking regulations, known as CRD4.
The change is aimed at allowing funds to lend to businesses here that are too small to tap the bond markets themselves but which still require substantial funding of between €20m and €125m.
Ireland-based hedge funds will be allowed to lend money under new rules announced by the Central Bank.
While such funds had previously been precluded from lending as it was considered too risky by the regulator, they could soon be allowed to create special funds to lend to business.
The Central Bank today issued a consultation paper on the issue and the rules could be in place by the end of the year.
Since the financial crisis there has been a dearth of lending to homes and businesses with increased demand for credit.
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The economy will expand by 3.3pc next year as exports rebound and the tax take improves, the Central Bank said in its most optimistic forecast in years.
Gross domestic product is seen growing 2.5pc this year and 3.3pc next year, the bank said in its quarterly report published this morning.
If correct, the economy will grow 12 times faster this year than it did last year when the economy eked out growth of just 0.2pc.
However, the bank also warned about giveaway budgets adding that weaknesses remain in European and international economies.
The OECD is looking at closing tax loopholes which allow some companies to legally pay little or no tax.
The proposed changes to the international tax regime must continue to allow a company to be incorporated in Ireland but not pay tax here if its tax home is covered by a tax treaty, the chartered accountants have argued.
Failing to do so could damage foreign direct investment, the Consultative Committee of Accountancy Bodies Ireland (CCABI) said.
CCABI said “certain academics” and others had been making inaccurate and damaging claims about the way in which Ireland conducts its tax affairs.
It made the claim in its submission to the Department of Finance’s consultation in relation to the so-called Base Erosion and Profit Shifting project (BEPS) from the OECD. Read more
Buyers, specifically first-time buyers, are getting shafted, as tighter credit conditions and 2005-level house prices push them out in favour of the cash buyer, the institutional investor, or the punter from the rest of the world looking for a decent rental yield in this low inflation, low interest rate, low yield world we now inhabit on this side of Europe.
Those on the sell side of the property market outside of Dublin also fare badly, as house price inflation is a mere 3.5pc there.
The increases are coming from a lack of supply. Standard economics tell you that these price increases will encourage more people to come back into the market, getting their house on the line so they can trade up, trade down, pay off debts, and so forth, and this increase in supply should help to moderate any further price increases. But this standard view ignores just how indebted many households are – the prices being talked about are still not high enough to repair the damage done to balance sheets by the global financial crisis. The view also ignores how strained credit conditions are in the economy at the moment. Only €539m of new mortgage lending took place from January to March of 2014. The prices are driven by a market lacking the key ingredient for adequate price discovery – liquidity. Read more
The study by accountants Grant Thornton concluded Ireland continues to outperform its competitors in attracting FDI.
But it warned more needs to be done to ensure it remains an attractive destination.
Jobs Minister Richard Bruton said it was important to determine the challenges that faced Ireland in the FDI sector.
“That is why my department will shortly publish our policy statement on FDI, and following on from that IDA Ireland will, over the coming months, develop a new strategy which will map out the future direction of FDI policy,” Mr Bruton said.
Success
“In this way we will ensure that we build on the successes of recent years, react to changing circumstances, and continue
to grow jobs in foreign companies in Ireland in the coming years.”
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Public Spending Minister Brendan Howlin told the Irish Independent he is having to “manage the expectations” of his cabinet colleagues, who are seeking to increase their budgets, despite the need to reduce the country’s debt levels.
The Government has accepted the adjustment in the Budget will be less than the projected €2bn.
But Mr Noonan warned ministers against assuming the Budget would be easy as a result. In a briefing to the Cabinet yesterday, he pointed out the tax take last year was high in the first half and tapered off towards the end.
Mr Noonan said nothing can be taken for granted on the figures for the second half of the year.
Mr Howlin pointed out spending overall was on target this year, despite the overrun in health. The Cabinet agreed the deficit next year would still have to be less than 3pc of GDP. But a government spokesman said the adjustment was likely to be less than €2bn. Read more
Asked about reports that president of the league Martin Sisk has been attending board meetings at the credit union for two years, a spokeswoman said a number of league personnel have been involved with the wound-up credit union.
The league, which is a representative body for most credit unions, was asked why Berehaven ended up having liquidators appointed by the High Court when it was aware of the problems at the Cork lender.
The league supervises a multi-million rescue fund for troubled credit unions called the Special Protection Scheme (SPS) fund.
Asked about Mr Sisk attending the bust credit union’s meetings for two years, a league spokeswoman said: “A number of league personnel have been engaged with Berehaven Credit Union and the Central Bank to facilitate a transfer of engagements which would have been facilitated by the (existing) Irish League of Credit Union SPS funds. Read more
