LARGE chunks of Ireland entered recession a whole six years before the country as a whole, according to new research.
Both the South East and South West went into recession more than a decade ago, according to new research from the Economic and Social Research Institute (ESRI).
The think tank said output in the two regions began to shrink from 2002 onwards, even though the country didn’t officially hit recession until 2008.
The deadline for the receipt of submissions on the proposed introduction of a cap on mortgages, which is due to be introduced early next year, passed at midnight.
It is understood that all the main banks submitted proposals on the new rules, but will not be publishing them.
The Central Bank plan would see potential mortgagees having to come up with 20% of the value of a property to put down as a deposit.
Irish family businesses need to adapt faster and become more professional, according to a new report from PwC.
PwC’s ‘Irish Family Business Survey’ for 2014 also shows that compared to other Irish business sectors, family businesses here see themselves as less entrepreneurial than their international counterparts.
PwC’s Irish Family Business Leader Paul Hennessy said that family businesses have changed their mindset since the survey was last carried out in 2012.
Central Bank urged to row back on proposed mortgage rules.
Ulster Bank has told the Central Bank that borrowers should be required to have a deposit of just 10 per cent if looking for a mortgage of up to €500,000, in a submission to the regulator about proposed new limits on lending.
Bank of Ireland, meanwhile, has urged the regulator to retain the current informal regime where customers can borrow up to 90 per cent of the purchase price of their property unless evidence emerges that prices are running ahead of the long-term average.
Sentiment in the euro zone picked up in December as investors took a brighter view of the future, probably due to expectations that the European Central Bank will start buying assets next year, a survey showed on Monday.
Sentix research group’s index tracking morale among investors in the euro zone climbed to -2.5 in December from -11.9 the previous month, faring much better than the -10.5 forecast in a Reuters poll.
The rise was driven by the third-strongest increase in investor expectations in the index’s 12-year history to 12.0 from their November reading of -2.0.
ECB President Mario Draghi said last week that the euro zone’s central bank would decide early next year whether to take further action to revive the bloc’s economy.
“His de-facto announcement of broad-based security purchase program is probably the main reason why investors’ expectations for the coming six months have improved so dramatically,” Sentix said. Read more
The Central Bank has chosen Italian credit checker CRIF as the preferred bidder to operate the new central credit register, the Irish Independent understands.
Early last week, the Bank chose the Italian company ahead of rivals including the Irish Credit Bureau (ICB).
The ICB, owned by the major Irish banks as well as credit card providers and credit unions, is the major credit checking agency in this country but is not backed by the State.
The ICB applied for the tender but was notified on December 3 that its bid was unsuccessful.
“ICB accepts the decision by the CBI (Central Bank of Ireland) to award the tender to another bidder,” an ICB spokesman said.
“While ICB notes this outcome the company will continue to provide credit reference services to Irish financial institutions.” Read more
THE Government wants the Central Bank to ease the introduction of strict new rules on mortgage borrowing by introducing the changes gradually.
In a submission to the Central Bank which will be lodged today, the Department of Finance will offer broad support for the regulator’s controversial plan to tighten the lending rules while calling for more flexibility in some areas. The regulator asked for suggestions after stunning the property market by revealing that it wants most first-time buyers to save at least 20pc of the cost of a house.
Finance Minister Michael Noonan will specifically say that he wants the Central Bank to introduce a transition period for the changes, rather than forcing borrowers to raise more money from next month. Mr Noonan also wants more people to be exempt from the rules. The Central Bank has said it believes 15pc of people should be exempt from the ban on borrowing more than 80pc of a mortgage.
Submission
Finally, the submission urges the Central Bank to focus more on loan-to-salary ratios and less on loan-to-value ratios. The Central Bank said in October than it wants to ban loans of more than three-and-a-half times salary
The Central Bank will begin sifting through submissions tomorrow, but Governor Patrick Honohan has already signalled that he may water down some of the measures.
The Department of Finance has waited until the last moment to issue its submission on the Central Bank proposals; the deadline for submissions closes today.
A group campaigning against the changes will deliver a petition to the Central Bank today. The new group, called Uplift, claimed yesterday the rule will cause more problems than it solves.
The Professional Insurance Brokers Association warned last week that the consequences of the Central Bank’s proposals to restrict mortgage lending will be “far more far-reaching than many realise”. Rachel Doyle of PIBA said: “It will impact young people’s ability to make any other contribution towards their financial future, including prudent pension planning, quite apart from using up, at a very early stage, tax-free family inheritances.”
Ms Doyle said the way in which the Central Bank consultation document is framed “leads one to become suspicious, despite recent indications from the governor, that the regulations are already drafted and are, in fact, a fait accompli”.
A spokeswoman for the Central Bank said the proposed requirements on deposits and the proposed stipulation that lending cannot exceed 3.5 times income are part of a consultation process. “When the consultation closes we will review all submissions and we will not comment on responses until after that time,” she added.
Article Source: http://tinyurl.com/kbwqb42
European stocks fell after European Central Bank president Mario Draghi said it will assess the need for further stimulus early next year, putting an end to speculation that it would take more immediate action.
Hopes that the central bank would embark on a government bond-buying scheme have been fuelling a strong rally in European shares in the past few weeks. The ECB also lowered its forecasts for euro zone inflation and gross domestic product through 2016. Banks, mining stocks and energy companies all declined.
The Dublin market went against the general trend, as Ryanair’s share price soared and sent the Iseq index to its highest level since June 2008.
DUBLIN
The Iseq index gained more than 1 per cent, lifted by a surge for Ryanair, which closed up 8.4 per cent at €9.45 after it raised its full-year profit forecast for the third time this year.
Insulation-maker Kingspan also had a good day, advancing 4.2 per cent to €13.76, while there were also gains for paper and packaging group Smurfit Kappa and Aer Lingus, which finished up 2.5 per cent at €1.79 on a good day for travel stocks across Europe.
Building materials group CRH, the largest stock on the index, was relatively flat at €19.69. C&C fell 1.75 per cent to €3.67. Investec, the specialist bank and asset manager, has won the joint mandate to be broker to C&C, along with Davy Stockbrokers. This mandate had been previously held by Davy with Goldman Sachs, the international investment bank.
Independent News & Media closed flat at 14 cent. Analysts at Davy Research raised forecasts for the stock on the back of a recent trading statement it described as “encouraging on a number of fronts”.
LONDON
The FTSE 100 lost 0.6 per cent after Draghi’s statement. Separately, the Bank of England kept its key interest rate unchanged at a record-low 0.5 per cent, as forecast by economists.
As Ryanair led a rally for travel companies, EasyJet gained 2.9 per cent to 1,716 pence after saying the number of passengers increased in November from a year earlier, while TUI Travel added 3.6 per cent to 444 pence after reporting that full-year underlying operating profit rose.
Miners and energy companies fell as Brent crude oil prices stayed below $70 per barrel. Anglo American declined 2.8 per cent to 1,283.5 pence after Bank of America recommended selling shares of the iron-ore producer. Rio Tinto Group dropped 2.6 per cent to 2,933.5 pence. Royal Dutch Shell was also lower at 2,229 pence.
EUROPE
Stocks sank across most of the major markets, with France’s Cac 40 index losing 1.6 per cent and Germany’s Dax dropping 1.2 per cent. Of the 18 western- European markets, Italy’s FTSE MIB Index and Spain’s IBEX 35 Index declined most, falling more than 2 per cent.
Spain’s Banco Santander lost 3.2 per cent and France’s BNP Paribas dropped 2.3 per cent, as market-watchers concluded investors had expected more than the ECB was able to deliver. Airlines had a good day, with Air France-KLM rising 1.6 per cent and Deutsche Lufthansa up 1.1 per cent. The sector has been one of the winners of the recent drop in oil prices.
US
US stocks were little changed at the midway point of the session, bouncing from initial losses after the ECB brushed off pressure for more immediate monetary policy action.
Chevron slid 1.2 per cent as energy shares tumbled the most among S&P 500 groups. Crude oil prices fell 18 per cent last month as the Organisation of Petroleum Exporting Countries maintained its output target, letting prices fall to a level that may slow US production growth. Microsoft rose 1.6 per cent as bookseller Barnes and Noble said it will buy back the company’s stake in its Nook business, which posted a loss that pulled down the US chain’s second-quarter results. Barnes and Noble fell 5 per cent.
Article Source: http://tinyurl.com/kbwqb42
The European Central Bank (ECB) left official interest rates unchanged and at an all time low on Thursday, good news for householders with tracker mortgages.
But, ECB president Mario Draghi issued new forecasts cutting the eurozone’s growth outlook for next year to just 1pc from the 1.6pc predicted three months ago.
Despite that, the ECB chief said he will wait until early next year to assess whether more action is to revive the economy.
The ECB’s Governing Council voted unanimously to take action that could include buying government bonds, if necessary, Mr Draghi told a news conference. “Should it become necessary to further address risks of too prolonged a period of low inflation … this would imply altering early next year the size, pace and composition of our measures.”
And he said that the slump in oil prices will help the eurozone, which is struggling to recover from the financial crash even though the UK and US have powered ahead.
Article Source: http://tinyurl.com/kbwqb42
The European Central Bank will make plain the euro zone’s economic malaise after it meets today, with a rare public call from Washington adding to pressure for action to stop the bloc going into reverse.
With recovery stalled across many of the 18 countries that share the euro, ECB president Mario Draghi will present fresh growth and inflation forecasts from bank staff at his post-meeting news conference. Both measures are likely to be downgraded further.
Mounting concerns about the euro zone economy were underlined by the US Federal Reserve’s influential vice chair, Stanley Fischer, who broke with etiquette to say that money-printing would help Europe as it had the United States.
“If the ECB moves in that direction, it will have positive effects,” Mr Fischer, who was Mr Draghi’s academic mentor at university, told a newspaper in Italy. But Mr Draghi faces considerable political obstacles to taking this step, chiefly from a reluctant Germany.
Last week, Sabine Lautenschlaeger, Germany’s appointment to the ECB’s Executive Board, said that now was not the time for state bond buying. So while the ECB could extend a scheme to buy secured debt to include corporate bonds, it is unlikely he will announce any money printing to buy government bonds.
Economists, roughly half of whom expect the bank to start buying government bonds – a step that should buoy the economy when banks exchange bonds for
ECB cash – have pencilled this in for the first three months of next year.
ECB vice-president Vitor Constancio has said the bank will be better able to gauge then whether it needs to buy such debt.
Other major central banks including the Fed, Bank of Japan and Bank of England, have already used quantitative easing to stimulate their economies. But divisions between debt-shy euro zone countries such as Germany and southern states including Greece make such a step more difficult for the ECB.
Germany, the bloc’s biggest economy by far and its most influential, fears it would encourage reckless borrowing. “The euro zone needs growth and jobs to ensure that it survives,” said Lena Komileva of consultancy G+ Economics, warning of the obstacles to so-called quantitative easing. “Germany’s strong opposition … raises questions about its ability to act fast enough.”
Mr Draghi will address the press for the first time in the ECB’s new €1.3 billion headquarters in a Frankfurt skyscraper. Just yards away from the imposing building, designed to show the strength of the currency, labourers queue up for a day’s work. But the bloc is in a delicate situation.
Euro zone inflation, a key yardstick of the economy’s health and viewed by investors as a trigger for the ECB to buy government bonds, slowed to just 0.3 per cent last month. If prices were to start to falling, as they already have in some countries, that could discourage consumers from shopping while they wait for goods to get cheaper, creating a vicious circle that pulls down the economy.
A conflict in Ukraine, which has frozen much of EU-Russian commerce, a slowdown in momentum in China and war in Syria add to the gloom, as does the tumbling price of oil. The ECB has already cut borrowing costs to record lows, given cheap loans to banks and started buying repackaged loans to kick-start lending.
Article Source: http://tinyurl.com/kbwqb42
