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Tuesday, 23rd April 2024
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Budgetary buzz
Budgetary buzz
While a certain amount of industry lobbying in advance of the budget is only natural this year’s budget seems to have created a real sense of expectation amongst Ireland’s financial community. There has been an inordinate amount of interest in how the Government should tackle inflation, and of course everyone has an opinion on what approach to take. Echoing calls in last months Finance Economists’ survey, this month’s news is dominated by the plethora of suggestions for incentivising long term savings. The EBS and Hibernian have both unveiled their suggestions for what the Government should be doing on long-term savings incentives. The EBS scheme certainly looks promising and is certainly an option that should be explored. While the cynical would say that such proposals are purely self-serving Martin Walsh of EBS said their savings account tax credit scheme has been drafted to be ‘institution neutral’. Hype aside encouraging savings could be an Irish solution to an Irish problem.

Single Regulator
Encouraging to hear that there appear to be moves at last to decide the single regulator issue. Mary Harney has indicated that a decision is imminent but, as many of you will recall there were promises that this would be sorted out last year. But it looks like the timing is right to announce a compromise solution to the debacle. Could this be true after the Attorney General Michael McDowell’s report of some 16 months ago suggesting just that was left aside? Of course the big question is who will get the job? Industry is whispering certain names, some more so than others, so be under no illusion, the candidates are there.

Reassessing Euro policy
The debate on euro policy has heated up in recent weeks with several anti-euro zone commentators creeping out of the woodwork.

The Attorney General McDowell is also at the forefront of the debate on Ireland’s membership of the euro zone. See excerpts from his speech to the ACCA Irish Financial Services Society on this page. ‘One of the blessings of membership of the euro zone is that there are less things to go wrong and in particular that interest and exchange rate policy is one area of potential political error which has been removed from the domestic political equation.’

John Beggs of AIB also has expressed a supportive view of Ireland and the euro in this months issue, see page 16. He’s predicting a ‘manageable tightening of monetary conditions in Ireland’ next year.

And the volatile euro has led many of our quarterly currency and bond experts to rue the day they predicted the levels for last quarter. Check out their performance on page 11. Nothing is certain but uncertainly itself it would seem, and indications are that that after the surprise intervention of the ECB to maintain the euro, we can expect an erratic quarter ahead.

Ubiquitous e-commerce
Surprising to find the treasury is feeling the impact of e-commerce to the extent suggested by our corporate treasury bankers this month. In a straw poll of the key issues in corporate treasury management e-commerce was a standard theme. (see page 6). Not only are company and banking systems changing to embrace the technology, allowing for the streamlining of company cash management, but Ireland is expected to follow Scandinavia’s take up of online FX dealing.

The impact has also been seen in the changing role of the corporate treasurer within companies themselves, with the indication that some Irish companies may be letting treasury slip down their list of priorities. Not a good idea in such a volatile climate. Strategies for managing your interest rate risk are also suggested on page 7.

Company financial functions, other than treasury, are also evolving in the new technology environment, as evident in Marian Corcoran’s piece on page 13. In a wake up call to some companies she says finance functions have to shift from being a corporate overhead to being an enabler of business-line decisions.

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