Month: September 2010

The Domestic Banking System

Eoin Dorgan’s letter in the FT this morning provides a useful reminder of the distribution of assets in the Irish banking system. Monday’s FT article used the Central Bank data on ‘domestic credit market institutions’ – the total assets of this group stood at €776 billion at end June.  Eoin Dorgan points out that the total assets of the ‘six domestically owned banks’ (I presume he means the six institutions covered by the guarantee) was €523 billion at end June.  The non-covered institutions (Ulster Bank, Danske, Bank of Scotland Ireland etc) account for one third of total assets and any comprehensive analysis of the expansion, collapse and restructuring of the Irish banking system needs to incorporate this category.

The full list of domestic credit market institutions is available here.

Politics in hard times

The FT is full of depressing news stories this morning, none of which are surprising.

In the US, a Tea Party candidate won the Republican nomination for the Senate elections in Delaware.

In France, Sarkozy suggested that Luxembourg (home of the Commissioner who sharply criticized him for the Roma expulsions) would do well to welcome a few Roma itself.

In Sweden, the Sweden Democrats, a party with roots in the neo-Nazi movement, may be on the brink of an electoral breakthrough that might see it hold the balance of power after the elections there.

And the Japanese decision to weaken the yen is provoking tension with Europeans and Americans.

Lots of zero sum thinking out there this morning: history rhyming.

More uni rankings

THE and QS are now divorced, so more rankings for all.

The Times Higher Education ranking is out too (the number in brackets is QS):

TCD: 72 (52)

UCD: 94 (114)

Cork: >199 (184)

Numbers 200-399 can only be had with an iPhone.

The THE ranking is of course far superior than the QS ranking because the Vrije U Amsterdam does much better according to THE (139 v 171) and ranks higher than U Amsterdam.

See Indo and Times.

Government Paid PWC €4.95 Million for Advice on Banks

The Irish state paid Price Waterhouse Coopers €4.95 million for advice and professional services in relation to the banking crisis.

PWC were commissioned after the state guarantee was put in place to assess the balance sheets of the covered banks. As I have noted here before, PWC finished their fieldwork in December 2008 and concluded in relation to Anglo:

Under the PwC highest stress scenario, Anglo’s core equity and tier 1 ratios are projected to exceed regulatory minima (Tier 1 – 4%) at 30 September 2010 after taking account of operating profits and stressed impairments … We used an independent firm of property valuers (Jones Lang LaSalle) to value a sample of 160 properties held as security in relation to the top 20 land & development exposures on Anglo’s books as identified in our Phase II review and report. The results of this work indicated that impairment charges over the period FY09 to FY11 would fall in a range between the two PwC impairment scenarios but closer PwC’s lower impairment scenario.

Can we ask for our €5 million back?

Notes on Banking and Central Banks

I know this website attracts a lot of readers who are interested in banking and in monetary policy. Often, these people are regular members of the public trying to understand what’s going on in the world but starting out from a somewhat hazy understanding of the various technicalities. So (hopefully without being too patronising) I thought I’d point people towards the course webpage for my UCD module “International Monetary Economics.”

This is a final year undergraduate module that covers banking, financial stability, monetary policy and some issues in international finance. Probably most readers will find the material pretty basic but for those of you who would like to have some material to study, it’s intended to help those with a limited background get up to speed with current events in banking and monetary policy. The focus is largely international but Irish banks get the odd shout out. This is the first week of classes (out of a total of twelve), so I’ll be adding lecture notes and other material as I go along.

Constructive criticism of the notes is welcome. (Long deranged rants about fractional reserve banking are not.)