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The Irish Independent reports that the government guarantee on bank deposits above €100,000 finally comes to an
end today, despite the nervousness over the Cyprus crisis.
The date had been announced last month by Finance Minister Michael Noonan and
a spokeswoman said there had been no change in the plans.
Under the Cyprus deal, deposits of more than €100,000 are expected to face
large losses. Deposits below that level will continue to be protected by
The hugely controversial guarantee announced to stave off a Cyprus-style
banking collapse four years ago meant most lenders to Irish banks, including the
failed Anglo, were repaid in full, but it never had to be used for deposits.
There have been no reports of withdrawals of deposits from Irish banks since
the Cyprus deal, although it is too early for any specific statistics.
Figures from the Central Bank yesterday showed that deposits from companies
rose by 4pc last year to almost €80bn. The rise in personal deposits compared
with a 3pc fall in 2011.
The financial position of the guaranteed banks has improved slowly in the
past two years.
Private deposits totalled €104bn , while loans fell 2pc to €153bn. At the
time of the guarantee the deposits covered were estimated at €180bn.
Targets for improving the ratio of loan to deposits have been relaxed, but
the squeeze on credit remains significant. Many of the large deposits that left
at the time of the crisis did not return to the Irish banks
The ending of the guarantee, while a sign of improved conditions, is a loss
to the Exchequer. The banks paid a fee for the benefit of being guaranteed by
the State and this amounted to €1bn last year.
The guarantee failed in its fundamental objective of restoring stability to
the banking system. After an initial positive response, investors and lenders
quickly realised that the Irish State could not cover the total €440bn
Deposits flooded out of the system and the European Central Bank insisted on
a bailout to allay fears of imminent bankruptcy, while it pumped in emergency
loans to the banks.
Those loans have also declined sharply in recent years but remain at
around €50bn. AIB at least is still unable to fully finance its operations in
the market and the confusion over Cyprus will not help the restoration of
The Government's main liability now is the €20bn invested in AIB, and
possible losses on the operations of NAMA. Some €30bn has been lost in Anglo.
The Irish Independent also reports that lending by Irish banks to small business fell 5pc last year, despite lenders'
repeated claims they are "open for business".
New statistics from the Central Bank paint a bleak picture of credit in the
During 2012 the banks doled out credit worth €25.7bn to non-financial,
non-property related small and medium enterprises. That was down 5pc year on
year, and the rate of decline continued through the end of last year.
During the fourth quarter alone lending fell €431m compared to the same
period in 2011, a slide of 1.6pc.
Overall, gross new lending to non-financial small firms topped €677m during
the final three months of 2012 – the highest level since 2010. There was just
over €59bn in credit outstanding in the non-financial SME sector at the end of
In a sign of the long-term issues in the SME sector though, the majority of
that €59bn is locked into the property related areas of construction and real
estate. During the boom, many firms indulged in property plays which are now
blighting businesses that are otherwise in healthy condition.
The banking lobby expressed dismay at the results and highlighted the fact
that overall lending was now at its highest level in more than two years.
"The report appears to be a bit more negative than we expected, and we are
flummoxed by that," said a spokesman for the Irish Banking Federation.
"The overall lending figure is the highest it's been in a number of years
"The reason the overall stock is down is businesses are still repaying more
than they're borrowing and the economic environment is still very challenging –
that's the bottom line.
"There are positive signs and that has been seen with the new lending figure
being up, and that has been bolstered by various business sentiment surveys
which have been on the up in recent weeks. There remains, however, a lot of
problems both in the SME sector and the wider economy," he added.
But the acting head of the Small Firms Association said the declines were
indicative of the problems facing the sector.
"This reflects what is happening on the ground regarding SME lending. The
banks are still repairing their balance sheets and while this is happening
lending will suffer," said Avine McNally.
Meanwhile, AIB has been accused of hiking up fees on business
current accounts by as much as 165pc.
According to the retail trade group RGDATA, AIB has informed many
of its business customers that from June 1 the bank intends to scrap 17c and
25c transaction rates for lodging cash and charge a standard fee of 45c per
This is a 165pc increase in fees for many RGDATA members who bank
with AIB, the group claim.
"Our members are extremely angry at this news. It is
incomprehensible that AIB is taking this action at a time when family owned
shops are fighting for survival with turnover in 2012 down on 2011," said
the group's director general Tara Buckley.
"Independent shops have taken every step to reduce their costs and
manage their businesses more efficiently. Margins in the trade have been
squeezed and many shops are barely breaking even."
AIB said the change came "following a review of negotiated fee
arrangements on certain business current accounts".
The Irish Times reports that a significant reduction in degree programmes and
an end to “problematic predictability” in the Leaving Certificate
have been announced as part of a major overhaul of the final State
exam at second level and the third-level admissions system.
Minister for Education and Skills Ruairí Quinn also announced
a review of grading bands at Leaving Cert level.
The strategy, Supporting a Better Transition from Second
Level to Higher Education , was outlined yesterday by a joint body
Irish Universities Association, the
National Council for Curriculum and Assessment, Institutes of Technology
State Examinations Commission and the
Higher Education Authority.
The plan was formulated in response to “collective concern”
over the pressure placed on students by the points race, the Minister said.
He outlined three key “directions for action” – a reduction
in the number of Level 8 programmes at third level (honours degree courses), a
review of Leaving Cert grading bands and an external analysis of the
predictability of content on Leaving Certificate exam papers.
The number of Level 8 programmes on offer in the universities
and institutes of technology has tripled in the last 15 years, to 946.
Philip Nolan of the Irish Universities Association said the proliferation of
courses was artificially inflating points requirements and creating points
instability from year to year.
“Many of these courses are simply variants of the main
discipline. Students face very complex choices and early specialisation. The
number of Level 8 courses must be radically reduced,” he said.
Mr Nolan confirmed he had the commitment of the seven
university presidents to move together to recommend to their academic councils a
significant reduction in entry routes.
An expert group has reported a reduction in Leaving Cert
grading bands could also reduce pressure on students. In 1992 the old ABC system
was broken down into 14 smaller bands such as A1 and A2.
“Our current granular grades system is becoming the sole focus for some students
and teachers,” said
Anne Looney, chief executive of the National Council for Curriculum and
“The feedback we received from teachers is that in order to
optimise student performance, learning in the real sense of the word is being
The group will now work on finding an approach to grading
that reduces the bands.
The third element of the joint initiative involves the first
external examination of the Leaving Certificate.
The review, to be carried out by the Oxford University Centre
for Educational Assessment, is set to establish areas of “problematic
predictability” in the Irish terminal State exam system and make
The Minister stressed that commitments made yesterday would
not affect students currently in the Leaving Cert cycle. “I expect to see a full
implementation plan before the end of the year, with clear plans for phased
implementation beginning for students entering the fifth year in 2014,” he said.
“Major changes will not occur without due notice being given
to schools, parents and students.”
Employers group Ibec has welcomed the decision to broaden the
entry routes into the arts, science, business and engineering faculties.
“In a fast-changing business environment, it is difficult to
predict future skills needs precisely, so it is more important for students to
have a thorough grounding in a core discipline,” said Ibec’s Tony O’Donohoe.
The Irish Times also reports that
Google plans to make digital eyeglasses in the US with Foxconn Technology Group
according to a person familiar with the plans.
The eyeware, designed by Google and featuring software and cameras, will be made
by the Taiwanese company at its factory in California, the person said, asking
not to be identified because the plans are not public.
Google co-founder Sergey Brin is touting the device, dubbed Project Glass, as
the future of mobile computing after describing smartphones as "emasculating".
Fashion designers, skydivers, acrobats and pilots have been used by Google to
demonstrate the eyeglass computers, according to posts on the project's website.
The Taiwanese company is the world's largest contract manufacturer of
electronics. The Financial Times reported earlier today Foxconn's flagship, Hon
Hai Precision Industry, will make the device.
Google plans to invite a limited number of users to test the interactive glasses
in the next few days after conducting an online competition, the
California-based search engine provider said yesterday.
The Irish Examiner reports that Paddy Power is betting on success in Cork after spending just short of €1m on
five outlets from betting chain Jameson Racing.
Four of the outlets are located in Cork — in Blackpool, Popham’s Avenue,
Ballintemple and Ballincollig. The fifth is located in north Dublin.
Paddy Power bought the shops looking to even the odds with its main competitor,
Ladbrokes, which had a larger presence in Cork. Industry sources suggest between
€900,000 and €1m was paid for the businesses.
As a result of the purchase, there will be five jobs and the 14 current
employees in the chain will retain their jobs.
Paddy Power will take possession of the locations at close of business on March
28, and they will reopen with a full Paddy Power makeover on Monday, April 1,
well in time for the Irish Grand National from Fairyhouse.
A spokesperson for Paddy Power said: “We’re delighted to be doing the deal with
Jameson Racing. It will be a tough weekend for our property team to get all the
shops ready and they will definitely miss their Easter Sunday lunch, but we are
confident when the outlets rise as Paddy Power on Easter Monday, it will all be
Each location will have new 47” TVs installed to show live racing, soccer, and
other sports action on Sky Sports and Setanta.
Paddy Power’s outlets in the Republic now total 219. Jameson Racing will
continue to operate two outlets, one in Togher, Cork, and the other in
Templemore, Co Tipperary.
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