Oh, and by the way, Anglo Irish Bank released their annual report for 2010 today. Apparently, they lost €17.7 billion. Don’t worry though, it’s manageable.
There has been a lot of focus in the past few days on stories based on leaks of Thursday’s stress tests results. Perhaps more important, however, is the question of what the plans are for the €150 billion in central bank funding that the Irish banks are currently receiving.
Two interest stories here and here suggest there is lot to be negotiated on this issue. While less visible than the question of the interest rate on Ireland’s EU loans to the sovereign, the questions of how long the Irish banks will have to pay back these loans, and at what interest rate, are perhaps more important.
I had missed this yesterday but it’s worth flagging for our readers in search of an investment bargain.
PENSION funds will be able to buy 30-year bonds at an interest rate of around 5pc, in a move that could ease funding difficulties for schemes. To be known as sovereign annuities, the new bonds may also lessen the liabilities in pension funds … Buying the likes of “safe” German 10-year bonds yields only 3pc, which does little to ease the funding difficulties in pensions … Director of funding at the National Treasury Management Agency Oliver Whelan told a conference yesterday there will also be an inflation-linked version of these bonds … Mr Whelan insisted that there was no default risk for pension funds buying Irish sovereign bonds, despite repeated questions from a number of trustees about such a risk … Mr Whelan insisted that no western country had defaulted since West Germany in 1948.
In a related development, Irish pension funds are soon to be offered shares in a well-known New York bridge. Apparently, it’s a tremendous investment opportunity.