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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Minister confirms private, lakes, woodland, gardens over 1 acre NOT included in property tax – “phew!” says a certain health minister

With mass opposition to tax on the family home this article outlines that certain folk will be exempt.

http://namawinelake.wordpress.com/2013/01/23/minister-confirms-private-lakes-woodland-gardens-over-1-acre-not-included-in-property-tax-phew-says-a-certain-health-minister/

The new property tax that will take effect from 1^st July 2013 was rushed through the Dail before Christmas, with the debate about its many and draconian provisions cut farcically short – in the end there were about three minutes per proposed amendment allotted for debates, and it was a pantomime display of democracy in action to see a Budget announcement one day, an expert report (which had been sitting on a minister’s desk for six months) published the next day and the next day still, 70-pages of new legislation.

In the rush, you might have missed some of the detail of the new household charge. And you might not be very pleased to learn that large country piles, and perhaps a few urban manors also, will not have to pay the tax on the value of so-called “amenity land” in excess of one acre.

Take the home on Shrewsbury Road in Dublin which was associated with the Dunnes, Sean and Gayle. “Walford” was bought for €58m at the height of the boom and was placed on the market with a guide price of €15m in 2011. It is understood that it still hasn’t sold. How much is it worth for property tax purposes? Difficult to say, but the property does have 1.5 acres of grounds. What we do know is the property tax will only apply to the first acre. As for the other 0.5 acre, that won’t be taxed at all.

Now take the country manor of embattled health minister James Reilly and his wife, Dot. Loughton House – pictured here – in Offaly is said to have 150 acres of amenity land, mostly woodland and gardens. How much will the man who has recently graced Stubbs Gazette have to pay in tax on the 13-bedroom mansion and surrounding land? Difficult to say, but what we do know, is that he will only have to value the sprawling estate as if it had one measly acre of amenity land.

In the Dail this week, the Minister for Finance Michael Noonan responded to questions from the Independent Kerry TD, Michael Healy-Rae and the Sinn Fein finance spokesperson Pearse Doherty. Minister Noonan did confirm that tennis courts are regarded as structures that need to be valued, and presumably outside swimming pools will be similarly treated. But if your home has private lakes, lawns, gardens, woodland only the first acre will be taken into account for valuing your property for the property tax.

Fair?

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Fine Gael and Property Tax Revolt

Folk are correct to be cynical about the politicians suddenly opposing the tax. It highlights they are feeling the effect of the mass opposition to the tax on the family home.

http://www.independent.ie/national-news/fine-gael-faces-property-tax-revolt-by-dublin-tds-3350341.html

FURIOUS deputies resent unequal burden on the capital's residents

The Coalition is facing a revolt from furious Dublin Fine Gael TDs who are "bitterly" opposed to Finance Minister Michael Noonan's property tax, the Sunday Independent has learned.

In an unprecedented revolt against their own senior party colleague, the angry TDs have claimed that what is being introduced as a property tax is a "smash and grab" attempt to raise revenue quickly.

It has emerged that a meeting of the Dublin TDs is being arranged for when the Dail returns, in a bid to have Mr Noonan substantially alter the structure of the tax before payments begin in July.

According to party sources, concern is mounting in the ranks of Dublin TDs about the nature of the tax. They include a number of senior ministers, Transport Minister Leo Varadkar among them.

TDs, speaking publicly and privately, have said they are to "lobby hard" in the coming weeks for Mr Noonan to amend the tax structure.

Speaking to the Sunday Independent, Dublin South TD Olivia Mitchell strongly dismissed Mr Noonan's claim that it is a local property tax.

"This is not a property tax. This is nothing more than a revenue-raising exercise, let's be clear about this. They needed €500m and this is how they have done it," she said.

Ms Mitchell continued: "I bitterly resent having to pay this because we are paying for the rest of the country. We do it already in terms of income tax, where Dublin subsidises the rest and here is another tax doing the same."

Dublin South East TD Eoghan Murphy said the tax is "grossly unfair" and called on Mr Noonan to take the few months between now and when the tax is introduced to make it fairer.

Mr Murphy said: "I do not believe we should now be trying to implement a fiscal transfer from urban areas to rural areas through a national property tax, as it undermines what is already being achieved through income taxes. I believe it to be a danger to social cohesion and I believe it to be grossly unfair."

He added: "It is grossly unfair to people living in Dublin, who may be paying much more than people living outside of the capital, for a far smaller property. And I believe this applies to the lower levy itself also and not just the mansion tax."

Mr Murphy also criticised what he called the "pro-cyclical" nature of the tax, which he said got the country in trouble during the boom, given the reliance on stamp duties.

Of most concern to the TDs is the lack of concession for those people who bought their house at the height of the boom and paid stamp duty, as well as the lack of deferral options for those who find themselves unable to pay.

Dun Laoghaire TD Mary Mitchell O'Connor said: "Many of the residents in these houses have the appearance of being asset rich but many are cash poor. This proposed tax does not take account of those who paid stamp duty of up to 9 per cent at the top end of the market. Many of those buyers had to borrow the money to pay that stamp duty. Many now are in negative equity or are in mortgage arrears."

Despite their opposition, none of the TDs voted against the bill before Christmas. Explaining her decision, Ms Mitchell said: "I and others feel it is better to bide our time on this. Come July, I will have all of Dublin behind me so it is better to stay in where you can have some influence."

Other Dublin Fine Gael TDs also raised substantial objections to the tax, but were unwilling to speak on the record. "This is going to be a red rag to a bull to Dublin people, who are stretched beyond belief already. I don't hold any hope of Noonan shifting, he is implacable," said one TD.

A number of Labour TDs are also known to be very unhappy with the tax. Dublin Mid West TD Robert Dowds is known to have spoken out against it at Parliamentary Labour Party meetings in the run-up to the Budget, demanding there be equity between rural and urban, saying it "must be affordable".

Responding to the concern within his own party, junior finance minister Brian Hayes played down the significance of the disquiet, saying "they all voted for it". Speaking to the Sunday Independent, he said: "The vast majority of the tax will be ring-fenced for local services. It was this or hike up income tax and nobody wanted that."

- DANIEL McCONNELL Chief Reporter

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Fitch joins Moody’s in predicting further major declines in Irish property

Worth a read.

http://namawinelake.wordpress.com/2013/01/09/fitch-joins-moodys-in-predicting-further-major-declines-in-irish-property/

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Minister Noonan admits he didn’t even bother seeking paycuts at basketcase Irish Life and Permanent

An article in relation to Irish Life and PTSB

http://namawinelake.wordpress.com/2012/11/14/minister-noonan-admits-he-didnt-even-bother-seeking-paycuts-at-basketcase-irish-life-and-permanent/

November 14, 2012 by namawinelake

It’s a financial institution into which we have poured €4.1bn so far, it employs 21 staff on basic salaries over €200,000 per annum and Minister for Finance Michael Noonan has admitted that he hasn’t even bothered to ask the organization, which has now been split into two – Permanent TSB and Irish Life – for paycuts on €200,000-plus salaries. At least Minister Noonan requested paycuts at NAMA and NAMA 100% complied, Minister Noonan did ask IBRC in April 2012 for paycuts to 30 staff whose basic salaries were €200,000-plus and IBRC told the Minister who is the sole shareholder in 100% of IBRC’s shares to get lost. But the Minister hasn’t even bothered to seek paycuts at Irish Life and Permanent.

Here’s what we found out yesterday in parliamentary questions from the Sinn Fein finance spokesperson Pearse Doherty to the Minister for Finance Michael Noonan.

Firstly, it should be said that Irish Life and Permanent no longer exists. It has been split into the bank, Permanent TSB and the life assurance company Irish Life. This split becomes significant because a rationale for the Minister doing nothing is that the life assurance company is profitable! You may recall similar protests at Bank of Ireland and AIB where departments complained about withheld bonuses because their departments were profitable!

We learned yesterday about the salary levels at Permanent TSB and Irish Life. At Permanent TSB there are nine staff being paid between €200-400,000 and one, the new CEO Jeremy Masding earns €400,000. At Irish Life, there are nine earning €200-400,000 and two earning €400,000-plus. In other words there are 21 staff at bailed out Irish Life and Permanent who earn more than €200,000.

The CEO of Permanent TSB, Jeremy Masding, who joined that bank in February 2012 earns €400,000 per annum. PTSB contributes €60,000 per annum in pension contributions and in 2012 there has been a one-off payment of €52,034 in respect of relocation expenses, the payment being made against vouched and receipted expenditure.  Jeremy is employed on a permanent contract and can be terminated with the payment of 11.5 months notice (equating to about €385,000).

The CEO of Irish Life, Kevin Murphy earns €500,000 a year and “other remuneration” of €86,000. He is retiring shortly and his contract doesn’t provide for termination payments.

In December 2011, the Minister wrote to the NTMA and NAMA asking that staff earning more than €200,000 per annum waive 15% of their salaries in 2012 or whatever amount their salaries exceeded €200,000 whichever was lesser. All staff at the NTMA and NAMA complied with the request.

In April 2012 the Minister asked IBRC if the 30 staff earning more than €200,000 would take a pay cut and he was told “no”. The Minister is the sole shareholder in 100% of the shares of IBRC.

Yesterday his response to the question whether he had asked Permanent TSB staff for paycuts was “I have not asked staff in Permanent TSB whose annual salaries are in excess of €200,000 to waive a portion of their salaries. However the Deputy will be aware that a review of remuneration practices at the Covered Institutions ( including Permanent TSB) is currently underway by my Department.”  The Minister is the shareholder of 99.5% of the shares in Permanent TSB.

In response to the question whether he had asked Irish Life staff for paycuts, the Minister said “I have not asked staff whose annual salaries are in excess of €200,000, of which there are currently 11, to waive a portion of their salaries. Irish Life is in a different position to the other financial institutions under our control in that it is profitable and operates in a very different competitive marketplace to the banks in which we have an interest.  As the Deputy will be aware, we intend to sell Irish Life as soon as is practicable and in the meantime need to ensure that the board and management of the institution operate in a manner which will maximise the value for the taxpayer at sale.” The Minister owns 100% of Irish Life.

So this basketcase organization, Irish Life and Permanent which admittedly had some profitable businesses – as did Anglo, INBS, AIB, EBS and Bank of Ireland – has received a bailout of €4.1bn to date and its 21 staff earning €200,000 and more, have not even been asked to take paycuts.

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Everything you ever wanted to know about public interest directors in our banks, but were afraid to ask

A most interesting article that featured on namawinelake.

http://namawinelake.wordpress.com/2012/11/14/everything-you-ever-wanted-to-know-about-public-interest-directors-in-our-banks-but-were-afraid-to-ask/

November 14, 2012 by namawinelake

The financial crisis that erupted in 2008 with the provision of the guarantee on €440bn of liabilities at our banks in September 2008 gave rise to a new beast in the Irish board room – the public interest director. In recent weeks, with revelations over salaries and pensions in state-guaranteed and bailed-out banks, public interest directors have come into focus as we wonder what exactly they do. They came in for criticism in 2010 when it emerged that millions were being paid in bonuses at some of the covered banks. This blogpost should tell you everything you need know about them, including who they are, what they’re paid and what they’re supposed to be doing – the information is sourced from parliamentary questions tabled by the Sinn Fein finance spokesperson Pearse Doherty yesterday which were responded to by Minister for Finance Michael Noonan – the full PQs may be available online later. Here’s the summary together with salaries. In total, between 2009-2011 they have cost us €2m.  You will not be happy with what you read.

Who are they? In alphabetic surname order.

Declan Collier is a public interest at AIB. He is the current CEO of the Dublin Airport Authority where his €106,000 bonus in 2010 raised eyebrows as it came on top of a €506,000 package comprising salary of €309,000 and pension contribution of €182,000. He resigned from  AIB’s board on 28th June 2012.

Tom Considine is a public interest director at Bank of Ireland. He is the former Secretary General at the Department of Finance from 2002 to 2006, having joined the Civil Service in 1974. He is regarded as responsible for

Frank Daly is of course the NAMA chairman and former chairman of the Revenue Commissioners. He had a 12-month stint as a public interest director of Anglo Irish Bank between 18th December 2008 and 22nd December 2009 when he became the NAMA chairman.

Alan Dukes was a public interest director at Anglo between 18th December 2008 and 14th June 2010 when he was appointed chairman but is seemingly still regarded as a public interest representative on the Anglo, now IBRC, board.

Margaret Hayes is a career public servant and former Secretary General at two government Departments.

Adrian Kearns was a public interest director at Irish Nationwide Building Society between March 2009 – his appointment announcement from then Minister for Finance Brian Lenihan is here – and June 2011 when INBS was merged with Anglo to form Irish Bank Resolution Corporation.  He is a former chief executive of the National Development Finance Committee and an assistant Secretary General at the Department of Finance.

Ray MacSharry is the 74-year old former Fianna Fail Tanaiste and Minister for Finance. He is a now a public interest director of Permanent TSB.

Rory O’Ferrall was a public interest director at Irish Nationwide Building Society between March 2009 – his appointment announcement from then Minister for Finance Brian Lenihan is here – and June 2011 when INBS was merged with Anglo to form Irish Bank Resolution Corporation. He is a former accountant with Deloitte and Touche.

Ann Riordan was a public interest director at EBS between January 2009 and June 2011 when EBS was acquired by AIB. Ann founded Microsoft in Ireland was in more recent times has served on the boards of Tourism Ireland and National Standards Authority.

Michael Somers is NOT a public interest director. Instead, Minister Noonan says he is “a Government Nominee (not a Public Interest Director) appointed to the AIB board on 14th January 2010 under the terms of NPRFC’s investment of €3.5bn in AIB of May 2009”. Got that, Deputy Shane Ross? NOT a public interest director but a Government-Nominee! Michael is the former CEO of the NTMA and used to earn €1m per annum in the good old days – his successor, John Corrigan will be lucky to gross €408,000 this year. He famously told RTE how he was worth it, and he had “plenty of other job offers and could have gone off” These days, he’s on the boards of insurance company Willis and Hewlett Packard Bank International based in the IFSC. Like Dick Spring (see below), Michael is also a non-executive director of Fexco.

Anthony Spollen was a public interest director at EBS between January 2009 and June 2011 when EBS was acquired by AIB.  He is a former director of Dublin Airport Authority and had a career at AIB, including a spell as financial controller of Allied Irish Investment Bank and Head of Group Internal Audit at AIB for five years.

Dick Spring is a public interest director at AIB and is of course, the former leader of the Labour Party leader and former Tanaiste and Minister for Foreign Affairs. He is a non-executive director of Fexco and has been associated with various financial funds in recent years, including Alder Capital.

Joe Walsh is a public interest director at Bank of Ireland and is a former Fianna Fail agriculture minister.

How much do they get paid?

It varies but in 2010, it ranged from €29-127,000. In the following year, 2011, there was some upheaval as EBS merged with AIB and INBS merged with Anglo to form IBRC.

When do they retire?

There is no set expiry date for the AIB or Bank of Ireland public interest directors says Minister for Finance Michael Noonan. The EBS public interest directors retired on 30th June 2011 when EBS was merged with AIB. The INS public interest directors resigned on 30th June 2011 when INBS was merged with Anglo to form IBRC. Anglo itself now only has its chairman Alan Dukes whose term expires in December 2014. With the split of Irish Life and Permanent into Permanent TSB and Irish Life, the two public interest directors are now only on the board of Permanent TSB and Irish Life has – shock, horror! – no public interest director. AIB has only one public interest director since Declan Collier’s resignation over the summer.

What are their duties?

Minister Noonan says that they don’t have any specific duties, but that ALL directors of the covered banks have duties under section 48 of the Credit Institutions (Stabilisation) Act 2010 which in turn sets out the duties under Section 4(f) which says

(f) to address the compelling need—

(i) to facilitate the availability of credit in the economy of the State,

(ii) to protect the State’s interest in respect of the guarantees given by the State under the Act of 2008 and to support the steps taken by the Government in that regard,

(iii) to protect the interests of taxpayers,

(iv) to restore confidence in the banking sector and to underpin Government support measures in relation to that sector, and

(v) to align the activities of the relevant institutions and the duties and responsibilities of their officers and employees with the public interest and the other purposes of this Act,

How well are they doing in performing their duties?

Minister Noonan demurs from providing an assessment when asked. He also says there is no formal reporting line to the Minister. He says “public interest directors do not have a formal reporting relationship to the Minister or to the Department of Finance. As Minister for Finance, I am strongly committed to ensuring that the boards of the covered institutions act at all times in a manner fully consistent with key public interest objectives for the banking sector.”

Given the backgrounds of the chosen directors – four former politicians and a smattering from the business world that have weathered their own pay controversies, you won’t be surprised that it is just now that revelations about banking pay and pensions are causing such outrage and there is no evidence of the public interest directors lifting a finger to pursue the subject privately in the banks.

Minister Noonan confirms there is no specific mandate given to public interest directors as opposed to all other directors, though Michael Somers is NOT a public interest director but a “Government nominee” so public interest directors aren’t even “Government nominees”. They’ve cost us €2m to date, they’re part time and generally have other preoccupations.

Is it time to terminate them?

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Permanent TSB makes €64m loss on disposal of loan portfolios

Excellent article published on Nama Wine Lake.

http://namawinelake.wordpress.com/2012/11/22/permanent-tsb-makes-e64m-loss-on-disposal-of-loan-portfolios/

November 22, 2012 by namawinelake

The regular audience on here will be aware of the prediction that Permanent TSB, the 99.5% state-owned bank, will run out of cash by April 2013 when it needs redeem significant bonds UNLESS the bank can dispose of assets beforehand or it gets an additional bailout. Yesterday, PTSB issued a statement to the stock exchange confirming that it has sold €351m of loans (net of provisions and write-offs at February 2012) for a total of €287m. This means that PTSB will need book a further loss in its books of €64m, and may arouse suspicion that the price is a fire sale price forced on PTSB by its imminent obligations to redeem significant bonds in January and April 2013.

The buyers of the loans are identified in the PTSB release as a SPV called “Consumer Auto Receivables Finance Limited” and a “global bank”. It is understood that Deutsche Bank is behind both, and industry insiders have raised eyebrows at the involvement of Deutsche Bank is these loans, the majority of which are understood to be car finance loans, because car finance is not an area in which Deutsche Bank specializes.

In addition, there has been a management buy-out of a PTSB unit, Permanent TSB Finance Limited. The management set up a new company called “First Citizen Finance Limited” and all staff in the PTSB unit are expected to transfer to the new company. The new company is contracted by the buyer of the loans to service the loans. “Management buy-out”  might be a grandiose term for this transaction as PTSB has said the sale was for “a nominal consideration”.The unit which was bought out by management made a €16m loss in 2011, according to the statement, but it is unclear if that includes loan impairments and the operating profit of the businesses was not disclosed.

So, did a bank into which we have to date shoveled €4bn and which we own 99.5% execute a financially stupid transaction? Was the sale price for the loans of €287m a “fire sale price” forced on the company by the need to repay bonds in January and April 2013. And was selling a unit to management for “a nominal sum” a good deal for PTSB? Davy Corporate Finance again advised PTSB and how much did they get paid on the transaction? How were the portfolios marketed so as to maximize value? Can we expect Deutsche Bank, which doesn’t specialize in car finance, to flip the assets and make a quick windfall profit?

Given that Minister Noonan keeps on telling us the details of these transactionsin banks which we practically own are commercially sensitive, who knows, who can tell.

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