Crisis Conference

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Trinity Economic Forum – February 8th and 9th

A student economic forum will be taking place in Trinity College on February 8th/9th

It is a ticketed event open to all undergraduate and postgraduate students.

Confirmed speakers include Lord Turner, chairman of the FSA, Willie Walsh, CEO of IAG and Andy Haldane, Executive Director of the Bank of England, among others. For interested students, there are a limited of tickets that can be purchased on the forum’s website.


Special NERI Seminar: Private Bank Debts and Public Finances – Some Options for Ireland

Details of this NERI seminar available here.


LSE Growth Commission Report

Although its focus is the UK,  much of this report is also relevant for Ireland: see here.

Banking Crisis Crisis Conference

Special issue on the politics of adjustment

The current issue of Intereconomics has a series of stories about the politics of adjustment in Greece, Ireland, Spain, Italy, and Portugal. Niamh Hardiman and Aidan Regan discuss the Irish case. It’s well worth reading all of the cases for those of us engaged in the current debate, to see similarities and differences in the approaches. It’ll help those of us (read: me) engaged in teaching this stuff as well.

Niamh will also be speaking on this theme at tomorrow’s Irish Economy conference.


Flee ‘safe’ sovereign debt, says Hasenstab

FT article here.


Irish Mortgage Arrears: An Economic Mystery

Irish mortgage arrears, particularly in the buy-to-let sector, are very high by international standards, at 8.8% for principal private residence mortgages and 17.9% for buy-to-let mortgages as of the third quarter of 2012. It is not all bad news, Ireland also has an extremely low rate of repossessions; there were a total of 79 judicial repossessions in the third quarter of 2012, consistent with the general trend over recent years. The Irish repossession/arrears rate is perhaps the lowest in the developed world. Notwithstanding that good news, the mystery of why arrears are so unusually high needs to be tackled.


Fake Portuguese economist unmasked

From the Guardian Blog (via Greg Mankiw): here.


Central Bank of Ireland Quarterly Bulletin 1 2013

available here.


Economic Adjustment Programme for Ireland — Autumn 2012 Review

The European Commission report is here.


European Banking Union

There is an FT op-ed today by Hau and Sinn, which is mainly about the importance of ensuring sufficient creditor bail-in to limit calls on taxpayers in the event of a crisis. However, it also argues that the ECB has gone too far in providing liquidity against distressed collateral in the periphery.  You can find it here.

There is a guest article by Avinash Persaud in The Economist here.  Persaud is concerned that a single supervisory mechanism will lead to “one size fits all” regulation of banks across the euro area, so that the response to country-specific asset bubbles may be inadequate.  It is not clear to me why a unified approach to regulation is inconsistent with the implementation of country-specific macro-prudential measures.

Crisis Conference

Conference on Irish Economic Policy Programme

Conference on Irish Economic Policy

Institute of Bankers, North Wall Quay, Dublin 1

February 1st

On February 1st 2013, the Dublin Economics Workshop, in conjunction with Economic and Social Research Institute (ESRI), the Department of Economics at the University of Limerick (UL) and the Geary Institute at UCD is hosting a conference on Irish economy policy at the Institute of Bankers.

The conference will explore current issues in economic policy in key areas:  Education and Children, Industrial Policy, Unemployment/Social Protection, Economics and Evaluation, and the Political Economy of Austerity. The outline programme is set out below.

The conference aims to provide a forum for discussion of new ideas on the conduct of Irish economic policy, including the extent to which economics and related disciplines can make a greater contribution to the conduct of economic policy in Ireland, and the extent to which policy can be designed more effectively. The speakers and chairs come from a range of institutions and disciplines and there also be online access to presentations to ensure to enable debate through blogs and twitter.  There is no charge for the conference. Coffee will be provided free of charge mid-morning and there will be a break at 12.45 to enable participants to take lunch.

To register for the conference, please email: . Advance registration is essential for attendance at the conference, i.e., is required for entry to the facilities.

9.15- 9.45

Registration and Opening


1. Education and Children

2. Industrial Policy

CHAIR: Minister Frances Fitzgerald (D/Children and Youth Affairs)

1. Orla Doyle (UCD/Geary) Experimental Evidence on the Early Effectiveness of Intervention in Childhood

2. Emer Smyth (ESRI) School factors and student outcomes: insights from longitudinal research

CHAIR:  Declan Hughes (Forfás)

1. Donal Palcic & Eoin Reeves (UL) Privatisation: past performance and prospects.

2. Fergal McCann SMEs in Ireland: Contributions, Credit and Economic Crisis (Central Bank)




3. The Labour Market

4. Economics and Evaluation

CHAIR: John McKeon (D/Social Protection)

1. Eilish Kelly (ESRI), Seamus McGuiness (ESRI), Philip O’Connell (UCD/Geary) Activation in Ireland: Are we on the Right Path?

2. Bryan Fanning (UCD) Why did Ireland become so open to immigration?

3. Frank Walsh (UCD) The union wage premium in Ireland

CHAIR: Frances Ruane  (ESRI)

1. Ronnie Downes (D/Public Expenditure and Reform) Economics & Evaluation in the Public Service – Capacity and Commitment?

2. Gail Birkbeck (Atlantic Philantrophies) Evaluating Services and Expenditures in the Social sector

3. Helena Lenihan (UL), Evaluating the impact of enterprise/industrial policy supports: developing new methods and approaches


Lunch Break


Plenary Session: Political Economy of Austerity

CHAIR: Robert Watt (D/Public Expenditure and Reform)

1. Niamh Hardiman (UCD) The politics of austerity budgets

2. Michael Taft  (UNITE) The Great Stagnation

3. Frank Barry (TCD), European Integration and Austerity

4. Colm McCarthy, Dubrovnik International University, What Kind of Banking Union for the Eurozone?

(We’ll be updating the conference programme as provisional titles come in).


Ireland as a Global Financial Centre

Interesting story here.


Central Bank Publishes Research on Irish Non-Financial Corporations Debt Levels and Housing Equity Withdrawal Trends

Information Release 28 January 2013

The Central Bank of Ireland today published the signed articles Why are Irish Non-Financial Corporations so Indebted and Housing Equity Withdrawal Trends in Ireland from the Quarterly Bulletin 1[1] for 2013.

The research found that Irish Non-Financial Corporations (NFC) are the second most indebted in Europe after Luxembourg when debt is measured as a percentage of GDP[2]. However when debt is measured as a percentage of their balance sheet size, NFCs in Ireland are relatively less indebted and fall below the eurozone average[3]. Results show that aggregate indicators can mask some underlying problems within particular NFC sub-sectors and therefore the use of a single indicator for the sector as a whole, in isolation from other data, can be misleading.

Irish NFC debt increased from 147 per cent of GDP to 204 per cent between Q3 2008 and Q2 2012 despite the economic downturn. The rising levels of Irish NFC debt reflect the large and increasing activities of multi-national corporations (MNCs) in Ireland in recent years.

While NFCs have significantly reduced borrowing from credit institutions through net loan repayments and loan write-downs, their borrowing from non-residents has increased substantially by 160 per cent between Q1 2008 and Q2 2012[4]. This latter trend largely reflects the substantial increase in MNCs in Ireland.

The research into equity withdrawals uses a unique data set to track changes in aggregate housing equity withdrawal between 1978 and 2012 and found that prior to the recent housing boom, aggregate equity injection was the norm for Irish households, mainly through the repayment of mortgage debt over time.

However, the property boom saw households move from aggregate equity injection to aggregate equity withdrawal.  It is estimated that aggregate equity withdrawal reached a peak of €8 billion, or 10 per cent of disposable income, in 2006. This trend was driven by an increase in the number and value of top-up loans, an increase in the number and value of transactions during the boom and a relaxation of credit standards leading to lower deposits, longer loan terms and increased number of interest only loans.

The decline in the property market has led to a reversal of these factors with housing equity withdrawal collapsing and reducing to its lowest levels, driven mainly by the decline in the number and value of housing transactions.



Yesterday, Pat Rabbitte and Ed Davey signed a Memorandum of Understanding. The MoU is crafted in terms of the Renewables Directive, which allows EU Member States to pool their targets. Essentially, the MoU gives the UK an exclusive claim on any excess (wrt target) renewables that Ireland may have. A monopsony is good for the buyer, but less attractive to the seller. Either the Irish government has little faith in the emergence of a market for renewable obligations, or perhaps Ireland felt it needed to do the UK a favour, for instance in return for the bailout.

The MoU does not specify any project, but there is an expectation (see here and here) of large wind farms in the Irish midlands, transmitted to England and Wales via a dedicated grid.

This is intriguing. Midland winds are not particularly favourable, and definitely cannot compete with the winds of England and Wales once the costs of long distance transmission, including an undersea cable, are accounted for. This project only makes sense when you consider the difficulties in building wind turbines in the England and Wales. Ireland’s comparative advantage is the weakness of its planning regulations.

There have been some exaggerated claims about the benefits for Ireland. Few jobs would be created here. There is no reason to assume that wind turbine manufacturers would set up shop in Ireland. Even the more lucrative parts of construction may well be done by specialist teams flown in from abroad.

Export earnings depend on the price. In England and Wales, feed-in tariffs are about 25 c/KWh for small, domestic suppliers. It is unlikely that large, foreign suppliers will be offered similarly generous conditions.

Profits are likely to be taxed in Ireland, but need not benefit Irish shareholders. There are no royalties on wind (and EU competition law prevents the introduction of royalties on wind-for-export only).

The wind power companies would need to lease land, but as the name of Bord na Mona is often dropped, this may be at a concessionary rate.

From an English perspective, this agreement makes sense in a narrow way. The choice is between yet another conflict with Brussels (if the renewables target would be ditched — the sensible thing to do), a reform of planning regulations, or a deal with the Irish.

From an Irish perspective, it is hard to find anything to commend this plan.


Call for Papers 2013 FMC2 Finance Conference (May 1st 2013)

The Financial Mathematics and Computation Cluster (FMC2) is pleased to announce that the 2013 FMC2 Finance Conference will be held in Dublin on May 1, 2013.

The FMC2 Finance Conference is a high-quality conference covering all areas of finance. Previous speakers at the conference (which replaces the Global Finance Academy annual conference) include Douglas Breeden, Michael Brennan, Julian Franks, Maureen O’ Hara, John McConnell, Stewart Myers, Matthew Spiegel, Hassan Tehranian and Raman Uppal. The format of this year’s conference is for six selected papers to be given 1 hour each for presentation. The FMC Scientific Advisory Board (see below for membership) will be present at the conference with the objective being to provide a setting that produces the kind of in-depth participation of a smaller conference.

PAPER SUBMISSION PROCEDURE: The submission deadline is Sunday March 3, 2013. Please submit papers under the subject heading ‘FMC Annual Conference’ to Irene Ward ( There is no submission fee.


EU/IMF Policies for Troubled Banking Systems

The debate about imposing losses on uninsured depositors in some Cypriot banks is the main story in today’s WSJ here.

Olli Rehn elaborates on bank recapitalizations here.


Public Lecture on Regulatory Purpose and the Rationale for Intervention in Capital Markets

Professor Justin O’Brien, University of New South Wales,  will give a public lecture Back to the Future: James M. Landis,  Regulatory Purpose and the Rationale for Intervention in Capital Markets on Monday 28th January at 6pm, in Newman House, St Stephen’s Green, Dublin 2. This lecture addresses contemporary problems of regulatory design through exploring the history of financial markets regulation. Attendance is free but booking is required at,159217,en.html.


WSJ Editorial on Debt Relief for Ireland





Half-Day Central Bank of Ireland Conference: 13th February 2013, Institute of Bankers, North Wall Quay, Dublin 1

8.45 – 9.00 Opening Remarks

Patrick Honohan, Governor, Central Bank of Ireland

9.00 – 10.30 Session 1: The experience in the United States

Paper 1: Dealing with a mortgage crisis: A comparison of the response by US and Irish authorities

Kieran McQuinn (Central Bank of Ireland) and Anthony Murphy (Federal Reserve Bank of Dallas)

Paper 2: Foreclosure externalities: Some new evidence

Kris Gerardi (Federal Reserve Bank of Atlanta)

Paper 3: The US mortgage crisis – are there lessons for policymakers

Michael Fratantoni (Mortgage Bankers Association) and Michael Moore (International Monetary Fund)

10.30-10.45 Coffee

10.45- 11.45 Session 2: Some Irish perspectives

Paper 1: A distressed mortgage market: Could a fiscal stimulus help?

Robert Kelly and Kieran McQuinn (both Central Bank of Ireland)

Paper 2: Understanding Irish house price movements – a user cost of capital approach

Frank Browne, Thomas Conefrey and Gerard Kennedy (all Central Bank of Ireland)

11.45- 1.00 Session 3: Panel discussion

Moderator: Alan Ahearne (NUI Galway and Central Bank Commission)

To confirm attendance, please e-mail: or


TCD Public Lecture: “How to Fix the Eurozone”

Charles Wyplosz will give a public talk at noon this Wednesday in the Long Room Hub.  This is part of a TCD LRH/IIIS series running during Ireland’s EU Presidency.  Details here.

Wyplosz will also give a research seminar 9am-10.30am on Wednesday in IIIS seminar room on “Eurozone Crisis: It’s About Public Debts, not Competitiveness


Eurozone links

With thanks to Eurointelligence, here are a couple of useful antidotes to the complacency that will kill the euro unless it is abandoned: here and here.

(If Ashok is right then, contra Manasse, the Eurozone crisis will become a bit more symmetric, but he is right to query whether this will be good news for the project.)

And here is an account of a Slovenian constitutional court decision. If the account of the legal reasoning is accurate then this is quite appalling.



The most recent issue of the Economic and Social Review has a symposium on the politics of financialisation, including papers on the US, a comparative analysis of financialisation and inequality in the OECD and my own paper on”The Crisis of Financialisation in Ireland”

The table of contents, with links to papers, is here:

The abstract of the Ireland paper is below:


Governor Honohan at the Oireachtas Finance Committee

The opening address by Governor Honohan at today’s meeting of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform is here.  The transcript of the meeting will be available in due course. [UPDATE: The transcript is here.]

There are several topics briefly covered in the opening address. On the Promissory Notes he says:

… there has been a very intensive process of discussion and negotiation on this matter, which is one of the two main thrusts of the Government’s policy to have a euro area review of the indebtedness arising out of the banking crisis. There is considerable goodwill from all interlocutors in this process. Nevertheless, it has not been easy to find a generally acceptable solution. Taking into account both the statutory position and wider policy stance of the ECB, an initiative of this type will be novel and as such challenging. Using our knowledge of central banking law and practice, we have been working carefully to build understanding and confidence around a set of proposed transactions designed to deliver for Ireland, while not taking other decision makers too far out of their comfort zone. The ECB is an organisation that seeks to proceed as far as possible by consensus, and it is not surprising that this work has been taking quite a while. In fact, what we have designed is, I believe, largely in the interests of the eurosystem as a whole.

In the subsequent words of Governor Honohan it seems that any deal is not “done and dusted”.

Economic history

Irish Quantitative History Workshop 2013

The annual Irish Quantitative History group meeting will take place in TCD, in the IIIS seminar room, 6th Floor, Arts Building, on Friday 25th January 2013, 2pm-6 pm.

  • Peter Solar (Free University Brussels), ‘Market Integration between Ireland and Britain: Timing, Causes and Consequences’

  • Frank Barry (Trinity College Dublin), ‘A Firm-Level Database on Manufacturing Industry in Protectionist-Era Ireland’

  • Richard McMahon (University of Edinburgh), ‘Homicide and Irish migration in late nineteenth-century San Francisco’

  • Aidan Kane (NUI Galway), ‘Exploring 17th century credit networks in the Irish Staple database’

  • Charles Read (University of Cambridge), ‘The Repeal Year: A Quantitative Reassessment’

  • As numbers are limited, please email if you intend to go along, and/or if you wish to be added to the IQH group mailing list. The workshop page (hosted by the Centre for Economic History at QUB) is here. The convenor of IQH is Eoin McLaughlin (University of Edinburgh).


    Dublin Review of Books

    New issue here.

    Includes economics essay by Michael O’Sullivan here.




    European politics International relations

    America, Britain and Europe

    I see that some people in Britain are in a bit of a kerfuffle about recent indications that the Americans would not be pleased if they left the EU. So it seems appropriate to quote at length from a well-known passage by Miriam Camps (1964, pp. 336-7):

    Early in April [1961], Mr. Macmillan went to Washington for talks with the new Administration. Although he had met the new President at Palm Beach in connexion with the Laos crisis, the April visit was the first opportunity for a general review of common problems, and Britain’s relations with the Common Market was obviously one of the matters which Mr. Macmillan wanted to discuss. The available evidence suggests that Mr. Macmillan asked Mr. Kennedy a hypothetical question: ‘What would be your reaction if we decided to join the EEC?’ and that he was given an enthusiastic affirmative answer. There is no evidence to suggest that Mr. Macmillan was ‘pushed’ by Mr. Kennedy, as was alleged, and denied, at various times. But it is clear that Mr. Kennedy left no doubt in Mr. Macmillan’s mind that a British decision to join the Six would be welcome and that Mr. Macmillan left Washington convinced that, far from straining Anglo-American relations, Britain’s joining the Community might well lead to much closer and more far-reaching transatlantic links than the British could hope to achieve in other ways. The reflection that the shortest, and perhaps the only, way to a real Atlantic partnership lay through Britain’s joining the Common Market seems to have been a very important — perhaps the controlling — element in Mr. Macmillan’s own decision that the right course for the United Kingdom was to apply for membership. Mr. Kennedy’s warm response undoubtedly strengthened Mr. Macmillan’s own conviction that joining was the right course of action and encouraged him to continue his efforts to bring the sceptics in the Cabinet to accept this view. Also, like the discussions with General de Gaulle and Dr. Adenauer earlier in the year, the discussions with the United States Administration underlined, once again, the fact that ‘association’ arrangements were not likely to be negotiable. It was clear that the United States was prepared to accept the additional commercial ‘discrimination’ against itself because of the political advantages it saw in British membership in the Community, but that it would be hostile to arrangements short of membership which, in its view, would simply increase ‘discrimination’ but would not, like full membership, add to the political stability of the Community or strengthen the ‘Atlantic’ orientation of the new power-complex the Six were clearly coming to be.

    Banking Crisis EMU

    Breaking the link between banks and sovereigns (or not)

    The FT has a sobering report here.


    Europe’s Parallels With the 1920s