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Thursday, 13th June 2024

The European Central Bank on Monday August 31st published its opinion on the draft NAMA legislation, that thankfully, along with the cash it proposes to backstop the whole enterprise, provides a balanced overview of the principles involved.

'Moral hazard’, a problem first noted as originating in insurance (as long ago as the middle ages), has been a well studied phenomenon in finance since the 1960s, yet, despite this, was the main cause of the credit crisis.

On 30th July the Minister for Finance published the draft text of the National Asset Management Agency (NAMA) Bill. NAMA is being set up to deal with the negative impact on the economy resulting from deficiencies in asset quality in the banking system says Sharon Burke.

The hedge fund industry is under attack by a small determined group led by France and Germany who are trying to push the Alternative Investment Fund Managers Directive, (‘AIFMD’) says Peter O’Dwyer. However, the newly-appointed chair of the European Parliament's Economic and Monetary Affairs Committee may give the hedge fund industry some comfort he says.

After 22 years in existence, the IFSC banking sector has been a cornerstone of the IFSC’s success. Liam Donlon, chairman of the Federation of International Banks in Ireland, looks at ways the sector can rejuvenate and adapt to ensure its future. Donlon pinpoints unique opportunities for the Centre and outlines the steps required to get to the ‘next stage’ for IFSC banking.

The final form of taxation to finance State spending is as yet undecided, pending a report from a commission. The scale and focus of State spending in the future is dependent on political decisions on the recommendations of a review group. In a crisis of public finances, key decisions especially on expenditure have been deferred on the occasions of two budgets. Is there a danger that the political responsibility for the decisions that have to be made, and the link between spending and tax, will be lost sight of?

The Irish Stock Exchange is set to introduce new changes to its compliance regime in September. In an interview with Finance Dublin Roseanne Kelly, head of investment fund listings said, ‘The Exchange regularly updates its Listing Rules to ensure they continue to remain relevant and appropriate to the market. To that end the ISE is currently nearing completion of a review of its compliance regime. The ISE is in favour of ‘smart’ regulation as opposed to regulation for regulations sake.’

Transfer pricing refers to the prices at which related companies trade with each other across borders. The purpose of transfer pricing regulations is to ensure a fair allocation of profits across territories by requiring that related parties transact with each other on an arm’s length basis. It should therefore come as no surprise that transfer pricing has become an area of increased focus for tax authorities during the recession, write KPMG's Dan McSwiney and Michelle Louw

Peter Oakes, in response to the Finance Dublin Top Executive Survey of IFSC Issues 2009, in the July issue, says the IFSC must take greater responsibility for its own regulatory regime and for the uninformed media coverage on the centre.

The growing importance of transparency and changes in the redemption policies of funds are two of the changes in the funds industry that the ISE foresees. Roseanne Kelly, head of investment fund listings at the Irish Stock Exchange, describes how the ISE is planning to meet these and other changes, in an interview with Kennedy O’Brien

BNY Mellon Securities Services (Ireland) Ltd recorded a strong rise in profits for 2008 and are confident of capitalising on further growth opportunities in 2009.

Multinational pension funds have traditionally been the main users of cross border asset pooling but State Street's Gavin Nangle says the benefits of pooling can be reaped in other sectors and will offer a new wave of business.

While concerns of future fallout for Ireland as a result of the G20’s tax policies persist, Ireland is gaining from President Obama’s initial moves against front line ‘tax havens’ such as Bermuda and the Cayman islands.

Figures from the Central Bank show the private sector is compensating for the rise in Government debt. Meanwhile the Central Bank figures on IFSC bank assets are released.

Wrong policy choices and inaction by Irish Governments led to lost decades in the 1950s, and in the 1980s, and policy failures during the boom years of this decade are ensuring that the coming recession will be deeper and longer in Ireland than elsewhere. ‘To have endured three periods of chronic economic underperformance in half a century as a result of policy mistakes must make it abundantly clear to all thinking people who care about the future of the country that the 1937 political framework is no longer fit for purpose’, writes Dan O’Brien, Ireland editor of the Economist Intelligence Unit in this extract from his forthcoming book, ‘Ireland, Europe and the World: Writings on a new Century’, to be published in the Autumn by Gill & Macmillan

Mayor of London Boris Johnson met Charlie McCreevy European Commissioner for internal markets and senior members of the European Parliament this month to campaign against the Alternative Investment Managers Draft Directive.

The impact of AIFM is hard to understate says JP Morgan's Carin Bryans. She shows what key aspects of the Directive would do to the Irish funds industry

THE FINANCIAL regulatory landscape in the EU will feature major personnel changes this Autumn as the European Commission and European Parliament appoint key policy makers.

Investor confusion about money market funds has led the SEC on June 24th 2009 to change its rules on the product. The need for improved clarity on and classification of MMFs is also needed in Europe. Matheson Ormsby Prentice's Barry Lynch and Fidelma Walshe say that rules to clarify the MMF label are important to secure the success of Ireland as a domicile of choice for MMFs in Europe.

Two consultation papers were launched by CESR on 8 July 2009, namely, a consultation on the format and content of the key investor information disclosures, and a consultation on the regulatory framework to underpin the management company passport for UCITS. Matheson Ormsby Prentice's Dualta Counihan looks at the key aspects covered in the consultation papers.

Reform of Ireland’s financial regulatory regime must identify the root of the cause of its failure says FTI's Eddie Fogarty. Regulation must be focused, relevant and effective and not impose a blanket of regulation across the entire market. There were both international and domestic causes of the crisis and we must understand these before we can find a credible solution he says.

The extent and speed of deterioration of economic conditions has heightened the need for companies to consider in great detail and perhaps refresh and possibly change their view and approach to areas of their financial statements which are subject to estimation and judgement. Particular attention also needs to be given to areas which are sensitive to changes in underlying assumptions that may impact an entity’s reported performance. Greater attention is also warranted in many cases to the disclosure and description of principal risks and uncertainties in the directors’ report, writes Brendan Sheridan.

Investment managers will need to reorganise their operations as a consequence of new initiatives being developed by the G20, OECD, US, EU and UK.

Two multi-storey car parks sit side by side on a Dublin street. One is obliged to charge VAT on its parking fees, the other is not. Does this seem fair to you? The European Court of Justice doesn’t think so and, in a decision which will have a significant impact across a range of sectors, ruled that Ireland’s VAT treatment of State and local authorities will have to change. And while the case is unlikely have a significant impact on the financial services sector it does provide an interesting lesson in demonstrating the ability of the European Commission to affect tax policy in the State, writes Niall Campbell.

The listing of the first CMBS transaction to come to market in Europe since 2007 is part of an increase in activity.

The Financial Regulator has published updated requirements papers for non-life, life and composite reinsurers.


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