More Nonsense from Noonan: Glove Puppet Of The Central Bank Usurers

Via Namawinelake.

Last November 2012, Minister for Finance Michael Noonan made an important discovery: he, or rather one of them mandarins in his Department of Finance discovered that section 33AK of the Central Bank Act 1942 provided the Central Bank of Ireland with a confidentiality defence to requests for information about the operations of banks in Ireland. Section 33AK is in fact a vast 2,500-word section inserted into the Central Bank and Financial Services Authority of Ireland Act 2003 and it allows the Minister to blame the Central Bank when declining to provide information on bank operations. Last November 2012, in a response to a parliamentary question, Minister Noonan said

“section 33AK(1A) prohibits disclosure by the Bank, its officers, employees, and agents, of confidential information concerning-

(a)    the business of any person or body whether corporate or incorporate that has come to the person’s knowledge through the person’s office or employment with the Bank, or

(b)    any matter arising in connection with the performance of the functions of the Bank or the exercise of its powers,

where the disclosure considered would be prohibited by the Rome Treaty, the ESCB Statute or the “Supervisory Directives”, as defined in section 33AK(10).

The most relevant supervisory directive in this instance is Directive 2006/48/EC.

Title V, Chapter 1, Article 44 of Directive 2006/48/EC, for example, imposes an obligation, on “competent authorities” (of which the Central Bank is one) for the purposes of that Directive to operate on the basis of professional secrecy. While a number of pathways for release of information are provided in the Directive (for example, a competent authority may release information where necessary to “bodies involved in the liquidation and bankruptcy of credit institutions and in other similar procedures” (see Article 44)), none of these facilitate release of information in this case.” [concludes]

As far as I can see, Section 33AK had never been mentioned by Minister Noonan before November 2012, but 33AK is now routinely used by Minister Noonan to tell pesky TDs to “get lost” when they try to ask important questions about the banking sector which has to date cost us €70bn including the €6bn of state aid premiums that NAMA has paid to the banks when it acquired their loans.

A fortnight ago, Deputy Mattie McGrath – see top of this blogpost – asked seven separate parliamentary questions which boiled down to “were Bank of Ireland, Allied Irish Banks, Permanent TSB, Ulster Bank, Danske Bank, ACC Bank and KBC Bank in breach of their banking licences”. The “get lost” response from Minister Noonan was Section 33AK restricts the Central Bank in its ability “to detail specific elements of the licensing and supervision requirements of individual credit institutions”

Last Thursday in the Dail, it was used against Deputy Michael Moynihan who was asking about the pace of progress into investigations at what was Irish Nationwide Building Society. Topical stuff from the Cork Fianna Fail TD, given the recent High Court applications against five former INBS officers including Michael Fingleton and former chairman Michael Walsh, and also following the recent publication of the Tom Lyons/Richard Curran book on “Fingers” or Michael Fingleton and the manner in which INBS had been managed up to point where it ended up costing us a €5.4bn bailout.  On Thursday last, the “get lost” to Deputy Moynihan was “I have been advised that an investigation is being conducted under the Central Bank’s Administrative Sanctions Procedure into historic lending practices at INBS. I am advised that for legal reasons, including the Central Bank’s confidentiality obligations pursuant to section 33AK of the Central Bank Act 1942, no further details can presently be disclosed.”

So, let’s get this straight: we now live in a Republic where the State has significant control and ownership of the banking sector which has cost us €70bn in bailouts, and yet we permit a piece of legislation to exist which prevents the finance minister being held to account on the practices of those banks. No doubt the mandarin discoverer of Section 33AK in the Department of Finance is regularly patted on the back, but for the sake of our Republic, shouldn’t this legislation be repealed?

Remember, we found out last year that Irish Bank Resolution Corporation was in breach of its banking licence but Section 33AK was used to obstruct us finding out any more with Minister Noonan saying in February 2013 “the Central Bank of Ireland has informed me that under Section 33AK of the Central Bank Act 1942, the Bank is restricted in its ability to disclose details of the supervision of individual credit institutions, and cannot therefore provide details of any breaches of the its licensing and supervision requirements”. It is now being used to obstruct our politicians in holding this Government to account in its oversight and management of the banking sector. What shenanigans are being hidden from citizens? And from potential investors including banks thinking of setting up shop in Ireland?

http://namawinelake.wordpress.com/

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Banking System,Governments, People

Matthew Elderfield, a Central Bank “Fat Cat” has become the latest bankster to threaten people with repossession of the family home. A strong campaign against eviction from the family home is underway in Ireland.

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Mortgage mayhem follows Anglo deal

Thought and Action is among those assisting people with the banks. Other recommended organisations are People for Economic Justice, Debt Options, The Common Law Society of Ireland, the Anti-Eviction Eviction Taskforce. Many blogs and websites will continue to spread the necessary information. Again let us remember with pride, Seamus Sherlock and his family.

The Irish will not be slaves to debt and banksters.

http://www.independent.ie/opinion/columnists/shane-ross/mortgage-mayhem-follows-anglo-deal-29076062.html

7 FEBRUARY 2013

POOR Patrick Honohan. He must be at the end of his tether. His colourful choice of imagery on Sean O'Rourke's Week in Politics programme last Sunday was arresting.

The Governor of the Central Bank revealed that the top brass in Dublin's Dame Street fortress were "tearing their hair out" at the lack of action from the banks.

The RTE interview should have been a lap of honour for Patrick. He had just pulled off a big deal on the Anglo promissory notes. So why in the name of God was the folically challenged Patrick "tearing his hair out"?

Patrick's outburst smelled of desperation, bang in the middle of sampling a Pyrrhic victory. Patrick was signalling a far worse problem than the Anglo promissory notes. The mortgage arrears crisis is coming to a crunch. And the banks have been simply ignoring the warnings from the Central Bank.

What is new?

Nothing at all. Once again bankers are running rings around regulators. This time the problem may be too big, even for professor Pat.

It was last October when Central Bank chief Fiona Muldoon stunned the bankers after she let them have it with both barrels about their failure to tackle mortgage debt. Fiona was the advance party in a Central Bank offensive to get the bankers off their butts.

The bankers hardly budged. Mortgage arrears have continued to soar.

One month ago Honohan publicly told the Dail's Finance committee that he was "unhappy" with the progress on mortgage debt. Everybody tut-tutted solemnly. Last Sunday he stamped his foot on Sean O'Rourke's programme. He grabbed a few headlines. The bankers sat tight, absorbing the abuse, but doing nothing.

And last Wednesday the Central Bank held a timely conference on "How to Fix Distressed Property Markets".

The host, Professor Patrick, opened the event with a broadside about the "extraordinary level of mortgage arrears in the State". Speakers from abroad were hauled in to tell us how fatal would be our laissez-faire approach to mortgage arrears.

Independent experts were damning in their verdicts. The Central Bank had organised a conference with critical speeches – heavily loaded in favour of house repossessions – as part of the solution to a mortgage crisis. A none-too- subtle message was being sent to the bankers and the Government.

What looked like a modest series of alert warnings a few months ago seems more like pure panic today.

Patrick is looking down the barrel of a gun. My guess is that there were two important dates in his calendar this year. The first was the pushover, March 31, D-Day for the Anglo notes.

The second was far more important. And far more dangerous. Originally, pencilled in for early July, the Irish banks were due to be stress- tested.

Stress tests have proved awkward hurdles for Irish banks. The last one, two years ago, has left still unanswered questions about the possibility of a flawed process, the bizarre treatment of a Central Bank whistleblower and the consequent credibility of the final outcome.

For some mysterious reason this year's stress test has been postponed. Originally scheduled for the summer, it has now been pushed back till the autumn. Even then, it leaves very little breathing space for Patrick to sort out mortgage debt. If the result of the stress test is credible this time, it will tell us that the banks are refusing to tackle a mortgage monster that is poised to expose them as insolvent.

The omens are not good. Action on the mortgage arrears front is close to a standstill. Bankers are relishing their paralysis. While repossessions stand close to zero the number of borrowers falling into arrears is rocketing. Recapitalisation looms.

Nearly one in four mortgages is in distress. Currently 135,000 homeowners fall into the arrears category.

The banks are reluctant to repossess any houses because the arrival of a flood of residences on the market will depress property values and expose the lower value of all the properties held on their books. In turn that will reveal that they have grossly underprovided for bad debts.

If they were then forced to write down the value of their security to realistic levels, they would urgently require more capital. Which they do already – but they are happy to pretend that the values are much higher.

In other words, they have been lying. Old habits die hard.

The bankers' escapism has been connived at by the Government. No politician wants to see repossessions. No Government wants to force the property market down to realistic levels. No regime wants to return to the taxpayer for more funds to prop up the banks. Better to live well in a fool's paradise than to meet your maker.

The refusal of the banks to repossess homes is far from an act of human kindness. It is a necessity to protect their web of lies. They are conveniently protected by a 2009 judgment, forbidding a lender to apply for repossession in certain circumstances .

Yet their failure to act, and the Government's reluctance to change the law, is leaving punters puzzled. Pressurised borrowers have naturally taken advantage of the lax regime exercised by bankers, albeit for unscrupulous reasons. The result is predictable. Mortgage repayments have become an optional extra.

Borrowers have learned that non-payment provokes few, if any, immediate penalties. They are discovering that their neighbours are not paying their mortgages either. Nothing happens.

The Government is colluding with the banks to allow mortgage mayhem.

And the number of punters in arrears is certain to rise in the coming months. Just wait until the Government's wretched property tax bills drop through the letter boxes. Homeowners will realise that they have no choice over whether to pay the property tax, as it will be confiscated from their wages or their social welfare by the taxman.

In order to pay their property tax, many will opt not to pay their mortgage, knowing that their seemingly benign, but deeply cynical banker is frightened of taking any action against them in case the entire edifice of lies collapses .

Mortgage anarchy is in prospect.

The banks have given the two fingers to the Central Bank. They are squatting on phantom balance sheets living in a fantasy world of padded house valuations. The day of reckoning is at hand.

The Government responded to the crisis with a feeble Personal Insolvency Bill, a piece of legislation that left power over mortgage arrears in the hands of the bankers.

Honohan has threatened to give the bankers "direction". They are hardly quivering with fear. God knows why he did not take this course years ago. He will need to kick ass, to tell them to recognise realistic values in their balance sheets, to make adequate provisions and then to come clean on their real capital needs. Alongside the mortgage arrears timebomb the Anglo promissory note was a walk in the park.

Patrick has seen into the abyss. That is why he is tearing his hair out.

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