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Wednesday Newspaper Review - Irish Business News and International Stories - - September 17, 2014
By Finfacts Team
Sep 17, 2014 - 11:56 AM
Some 120 banking officials are set to appear in front of the long-awaited inquiry into the banking collapse.
The long-awaited €5m Oireachtas Banking Inquiry is to investigate the controversial bank guarantee, the troika bailout and the decision to liquidate the IBRC, the former Anglo Irish Bank, the Irish Independent can reveal.
The committee is set to adopt the recommendations it received from its ad-hoc advisory group, which included economists Colm McCarthy and Megan Greene and a number of top civil servants.
The 11-person committee will meet today in private to sign off on its terms of reference.
Its proposal document, seen by the Irish Independent, outlines how a two-phase inquiry will examine events from 1992, when European banking capital requirements were changed, up until the end of 2013.
Rating agency Standard & Poors (S&P) says Allied Irish Bank and Bank of Ireland have improved their ability to meet the cost of any new emergency.
The rating agency revised upwards its assessment of the liquidity positions of both banks.
AIB, led by David Duffy, and Richie Boucher's Bank of Ireland are regarded as having "adequate" liquidity and "average" ability to finance themselves on the markets, S&P said.
Banks' improving funding position is mainly down to the reduction in lending to customers since the height of the credit bubble, and the ditching of illiquid investments, the report said.
The better assessment for AIB and Bank of Ireland in particular is down to the reduced dependence on emergency funding from the European Central Bank (ECB), the agency said.
MAJOR changes to the international tax landscape has been proposed by a global economic think-tank with major implications for Ireland.
The Organisation for Economic Cooperation and Development (OECD) unveiled its first recommendations for a co-ordinated international approach to combat tax avoidance by multinational enterprises.
The Paris-based organisation is trying to stamp out tax avoidance by big companies and create a single set of international tax rules and clamp down on the shifting of profits to jurisdictions to avoid paying tax.
Finance Minister Michael Noonan said Ireland has been involved in all aspects of the discussions and welcomes the publication of the reports.
“Significant progress has also been made in the areas of coherence, substance and transparency and while further work is required in some of these areas, the reports are a further step towards multilateral co-operation on countering base erosion and profit shifting by multinationals,” he said.
Minister for Finance Michael Noonan has said he will not personally intervene to ask former ECB president Jean Claude Trichet to attend the banking inquiry.
However, Mr Noonan said for an efficient inquiry to take place it must “ hear from everybody who’s directly involved”.
Asked if he would appeal to Mr Trichet - who has indicated previously he will not attend - to come to Dublin, Mr Noonan said: “I don’t be talking to him”.
Government ministers insisted today that Ireland had nothing to fear from OECD proposals to clampdown on multinational tax avoidance.
Ireland has been at the centre of the storm over multinational tax because of the aggressive tax strategies deployed here by companies like Apple and Google.
Minister for Finance Michael Noonan said Ireland has been actively involved in all aspects of discussions on the OECD proposals.
Both the scope and the force of the OECD proposals to overhaul global business tax rules herald change to the contested Irish regime. At issue now is the magnitude of the eventual change and its timing.
In downtown Paris yesterday, in the glassy headquarters of the OECD, its chief Ángel Gurría described the campaign to eradicate aggressive avoidance by big companies as a moral drive to ensure fair play.
“These practices erode the integrity of our tax systems, damage the capabilities of our governments, diminish the growth potential of our economies and corrode the trust of our citizens in the institutions that we created in the past 100 years,” he told reporters.
The ECB will rewrite a non-disclosure agreement with lenders undergoing its current health check after fewer than half the institutions agreed to the terms.
“We’re working closely with banks and as part of this, we will address feedback received on the non-disclosure agreement in a revised version to issue to banks in the coming days,” the Frankfurt-based ECB said in a statement.
As it subjects about 130 of the eurozone’s largest banks to a year-long asset review and stress test, the ECB is nervous of leaks endangering financial stability.
Results from the assessment are due to be released to the public in the second half of next month, before the central bank takes over financial supervision duties for the region in November.
Euro Topics: The parliaments of Ukraine and the EU ratified the association agreement on Tuesday. However its free trade provisions won't enter force until the end of 2015. The members of parliament in Kiev also passed a law granting eastern Ukraine more autonomy. Commentators criticise the concessions to Russia and the separatists and see many obstacles still blocking Ukraine's path towards the West.
Brussels must now promote democratisation: The signing of the association agreement between Ukraine and the EU commits Europe to help bring about change in Ukraine, historian Timothy Garton Ash writes in the left-liberal Austrian daily Der Standard: "Now the European and Ukrainian parliaments have simultaneously ratified the EU-Ukraine association agreement, the EU must help Ukraine to become a halfway properly functioning state. In terms of influencing the Russian-speaking Ukrainian public, the single most effective step the EU could take would be to move towards visa-free travel for most Ukrainians. All experience from post-communist eastern Europe suggests this is what turns opinion fastest, but it is of course a huge ask for an immigration-wary western Europe. In return for such major incentives, the Ukrainians must get serious about reforming their own state. First and foremost, this means fighting the grotesque corruption that has been the stock in trade of post-Soviet Ukrainian politics. That has to change."
Kiev cements Putin's influence: With the law on a special status for eastern Ukraine Russian President Vladimir Putin has achieved his goal, the liberal German news portal Zeit Online comments: "Kiev is de facto giving the separatists long-term control of the areas they seized. There are to be local elections at the end of the year - as if one could expect them to be orderly and fair, or in other words free of Russian influence. The regions are even to be allowed to put together their own people's militia - as if that wasn't just calling it by a different name that elevates the Kremlin's military stooges to the status of defenders of the people. In this way Putin has his foot in the door when it comes to the fate of Ukraine. By now it must be crystal clear to everyone that he wants to prevent the country from moving closer to the West and that he won't willingly allow it to it escape his sphere of influence."
Valls waffles under attack from all sides: French Prime Minister Manuel Valls won Tuesday's vote of confidence by a narrow margin. Nevertheless the policy statement he delivered before the vote once again illustrates the government's zig-zag course, the liberal business paper L'Opinion believes: "The hymns to a supply-oriented economic policy are followed by a demagogic ode to the state and to our social model - despite its bankruptcy. The call to adhere strictly to our European commitments is followed by a hackneyed appeal for a 'firm dialogue with Germany'. This metamorphosis is understandable: Manuel Valls was no longer addressing the people of France but the rebellious members of the Assembly, confirming in this way indirectly the government's paralysis in the absence of solid political backing. Without any results to show on growth or unemployment, the prime minister is on the defensive and obliged to lower his sights and fall back on a policy of 'neither/nor' (neither taxes nor additional budget cuts)."
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