The need for austerity in economies with debt overhangs like Ireland’s has not been disproved by the recent study – Constantin Gurdgiev (interloper)
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Pray you’re not done by Irish Political Weekly, the Savage Eye or Katherine Lynch – by Michael Smith
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Before Pat Kenny broke his chains Gerard Cunningham looked at RTE Radio 1
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Resigned Lord Laird’s symbiotic relationsip with the Sindo over the years promoted some regressive causes THE political demise of Ulster Unionist, Lord Laird, who has lost the party whip after being stung by the Daily Telegraph/ BBC Panorama in the latest ‘cash foraccess’ scandal, may not be as shocking to those who have observed, and been at the receiving end, of his political antics over the years. The good Lord is a public-relations man who has always been alive to opportunities to improve his own finances through his vital political work in the British upper house as these latest revelations appear to confirm. Previously, he had been prominent through his role as chairman of the Ulster Scots Agency which he vigorously promoted as a counterpunch to what he perceived as the ‘Fenian’-inspired Irish-language movement in the North. His efforts to politicise the language issue did not go down well with the Scottish language-enthusiasts, or the Irish ones. He also worked as an advisor to the Loyalist Commission, an assortment of unionists and former loyalist paramilitaries as they sought to challenge the republican and nationalist narrative during the early years of the peace process. His elevation to the House of Lords in 1999 provided him with a unique platform from which to ply his particular brand of politically-loaded propaganda which also happened to coincide with the interests of some of his clients. In early !&&’, he launched a vitriolic attack on former Taoiseach, Bertie Ahern, over the latter’s alleged links to former trade-union official, Phil Flynn, then under investigation in relation to the Northern Bank robbery. Later in the year he abused his parliamentary privilege when entering into the controversy surrounding the newly-established Centre for Public Inquiry, and in particular this writer, when he accused it of being an “intelligence gathering operation” for Sinn Féin. In a remarkable coincidence, both stories had been a matter of considerable interest to the Sunday Independent which then ran lengthy and “exclusive” extracts from Lord Laird’s “privileged” speeches. Coincidental too, that Lord Laird acted as a paid PR consultant to the newspaper. In 2002, he provoked the ire of the late Inez McCormack (the first female president of ICTU) who complained to the UN over Laird’s “misuse” of parliamentary privilege to attack the Belfast-based human-rights group, Committee for the Administration of Justice, which had a strong record of revealing abuses by the British security forces in the North. In 1995, Laird went on to claim in the Lords that there were 200 IRA “sleepers” in high places in the Republic, a claim that also resonated with the more hysterical outbursts from the Sindo. During the same year he found himself in hot water when it emerged that while chairman of the Ulster-Scots agency, Laird had spent in excess of £2500 of public money on taxis between Belfast and Dublin. His penchant for highlighting, under Lords privilege, issues that appealed to the muck-raking tendencies of the Sindo, and the vibrant reciprocity of Ireland’s best-selling Sunday, must have seemed like a marriage made in heaven at the time but Lord Laird’s habit of digging ever deeper holes for himself has prejudiced the relationship more recently. There was scarcely a peep out of the newspaper in March when Laird defended his client, US businessman Christopher Knight, against allegations of child sexual abuse. Knight did not contest charges in Florida that he had sexually assaulted a victim, then 12 to 15 years old, in 2003. Laird described the allegations as a “minor misdemeanour”, although he later apologised for his remarks after being rebuked by UUP leader, Mike Nesbitt. He said the ill-advised comments arose from his “professional association” with Knight who was seeking to invest in the Belfast Giants hockey team. It will be interesting to note the response of the Sindo to the televised disclosure that its favourite peer is accused of seeking £2000 per month in exchange for getting questions raised in the Lords that could be helpful to the authorities in Fiji. “I’ll deny having said this, but it’s a bribe….the sort of thing I can say to these guys…you put that question down now, I thought you were interested in Fiji, would you like to come down to it, you know, I believe it’s quite nice… I can whisper that”, Laird was recorded as saying to undercover journalists posing as representatives of the Fiji government. On this occasion, Nesbitt decided an apology was not enough and, pending the outcome of a review by Westminster authorities, asked Laird to resign the party whip.
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Seven years after the last Israeli invasion, Lebanon’s still violent existence is, as always, fragile – Lorraine Courtney
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Profile – Catherine Day
Some Day – Irish EU Commission chief is market-oriented and not environment-friendly Michael Smith
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UniCredit breached liquidity requirements in 2007. Matthew Elderfield nods. The interconnectedness of banking dysfunctionality. Michael Smith There is a general official view that Ireland’s ethical delinquencies are in the past. Corrupt planning stopped when the tribunals started; and bad bank-regulation stopped with the demise of Pat Neary and the production of two limited and innocuous reports by Patrick Honohan and Klaus Regling. Inconveniently for a country that has started to see regulation in black (then) and white (now) terms, the general view does not reflect the reality. Hold tight for a mind-boggling trip through the complexity of banking dysfunctionality. Liquidity is the short-term financing vital to ensure the banks still do their core job of funding the economy. Somehow Ireland went from having liquid banks to having banks so illiquid that a bank guarantee was offered by the government in September 2008. But there are staff in every bank legally charged with ensuring banks do not become illiquid. There is an intricate and comprehensive system in place to ensure they cannot become illiquid, bearing in mind their customer base. It involves arrangements they must have in place if for some reason they become illiquid e.g. they can ask another named financial institution to lend them money short-term. Every morning the banks have to produce a report showing how they kept their liquidity up to the target the previous day. The measure used for the target is the ‘liquidity ratio’. In mid 2007 the financial regulator, Pat Neary – following a six-month ‘dry-run’ – introduced a new rule for the liquidity ratio implementing the latest Basel banking accord. It required that cash inflows equalled at least 90 per cent of cash outflows forecast over the relevant period. This prudential system was, and is, central to how banking is possible. The system was intended to be stringently monitored by the financial regulator. In fact Village has evidence that a failure of liquidity, that if it – as may well have been the case – was typical to both Irish banks and foreign-owned subsidiaries, shows dysfunctionality on a scale that should have prompted the financial regulator to advise the government to go out into the markets and get funds for the banks immediately, was ignored by the regulator. Nor did auditors pick up on it. Indeed it is highly likely that liquidity problems were dysfunctionally glossed over by auditors all over Dublin’s financial world around this time. If such dysfunctionality had not occurred and been ignored for so long after the collapse of Northern Rock, Ireland could have dealt with general bank liquidity in a structured and gradual way – and not purportedly needed the bank guarantee that has finished up bankrupting the country and immiserating much of the population. The people behind this dysfunctionality should be made to account for it. The new regulator, Matthew Elderfield, should explain what went on on his predecessor’s watch so we can see what happened. Instead it appears the new regulator is being disingenuous. In late July or early August 2007, an experienced financial risk-manager, says he discovered his employer bank – the Irish subsidiary of the giant UniCredit Bank of Italy – had been dramatically breaching the liquidity ratio. The risk-manager maintains he was specifically warned by senior personnel at the Irish subsidiary not to report the matter to the financial regulator in Ireland. On one occasion he reported a ratio of only 70% to the regulator (and obtained a receipt). In fact he says “I was getting 75%, even 65%, not occasionally but day in, day out. Banks are obliged by law to maintain all daily records for at least five years so there must be written evidence of this. At the time, I thought: ‘Is it my fault?’ Then I asked questions and I was told ‘it’s a system error’ or ‘a trader forgot to book a deal’ or ‘it’s complicated. Give it a bit more time and you’ll understand. It will be fine’”. In any event, even if taken at face value, such failures would attract penalties under Sections 3.4 and 10 of the regulator’s Requirements for Management of Liquidity Risk, 2006, which seem to impose fairly strict liability. Ascertaining the liquidity ratio is a complex task and eventually the risk-manager turned to a consulting company in London for help, affording it access to UniCredit’s systems. That company – a company which continues to provide such services for some of Ireland’s most well-known banks – calculated the liquidity ratio at an extraordinary 50% when a ratio of 89% would in normal circumstances be deemed problematic. The risk-manager resigned, in part fearful of the draconian penalties that applied for breach of the law. A simple call to UniCredit’s Milan-based parent could have been expected to generate a transfer of many billions of Euro within a few hours, so resolving the problem. But that would have undermined the parent bank’s confidence in its Celtic subsidiary, and perhaps jeopardised bonuses against a background where the previous year’s final accounts had anyway required substantial and embarrassing revision to the tune of tens of millions of Euro. Around two weeks later the financial regulator came in on a scheduled inspection. It appears all hell then broke loose with the regulator effectively taking over the firm for two weeks. During this period the arrangement with the expert London consulting company was terminated, so it may have proved difficult for the regulator to ascertain the prevailing liquidity ratio. The risk-manager was warned by his former employers that repeating his story “to a third party would constitute grounds for a claim of defamation which we would not hesitate to pursue”. Solicitors McCann Fitzgerald wrote to him on their behalf advising that his allegations were “outrageous”. They have claimed the same to Village. What is surprising is the reluctance of Irish authorities, and indeed Irish politicians, government and opposition alike, to make the running with this still unresolved issue. The honourable exception is Senator David Norris who outlined the events described above and pushed the
