Conference on the German 3-Pillar Banking Model, RDS, 16 November 2016

The RDS will be hosting a conference on alternative banking models, focusing on the German 3-Pillar Banking System. The presentations will focus on the development and operation of the German Sparkasse banks and how to re-introduce that model of banking into Ireland. The Sparkasse banks focus on SME lending and form the backbone of the German banking system, especially in economically depressed regions and were a key part of the transition of the old East Germany.

Key speakers will be:

Prof. Eoin O’Dell, TCD Law School

Topic: How to create an Irish legislative environment for Sparkasse-style public mandate banking. 

Dr. Karl-Peter Schackmann-Fallis, Executive Member of the Board of the German Savings Banks Association

Topic: The Roots of German Local Banking, and its Future.

Mr.Heinrich Haasis, President of the World Bank of the Savings Banks, The Chairman of the Board of the Sparkassenstiftung für internationale Kooperation

Topic: Think global, act locally, cooperate internationally! How Sparkassen style banks have been introduced around the globe to benefit SMEs and the local community.

The event will be chaired by former TCD Economics Professor and Senator Sean Barrett.

Dr. Barrett was a member of Joint Oireachtas Inquiry into the Banking Crisis. Dr. Barrett will chair the conference and provide a closing comment on how the failures of 2008-13 could have been avoided and the need for a new approach to banking in Ireland. 

Registration for the event is here: http://www.rds.ie/Whats-On/Event/26638 

What: Conference on the German 3-Pillar Banking Model

When: 16 November 2016, 10h00-15h30

Where: The Royal Dublin Society (RDS) Library, Ballsbridge

Report of the Fiscal Council

Is here (.pdf). A few days late to this, so apologies, but just one thought:

Think how far our budgetary institutions have evolved. From Charlie McCreevy getting up on Budget Day in the early 2000s and announcing measures his own cabinet hadn’t heard of, to today’s fiscal council reports, Spring Statements, National Economic Dialogues, to the design of new structures like the Budget Oversight Committee, reviews of the process of national budgeting (.pdf), a Parliamentary Budget Office to cost the figures independently, and an agreed spending envelope by the public, a lot has changed in 15 years.

Despite the annoyance it generated during the election, the ‘fiscal space’ is a well recognized academic idea dating back to the 1990s, and the fact that the entire debate took place using broad parameters everyone serious agreed upon is a very good thing. We actually had a debate in Ireland, messy and all as it was, on whether to spend more on services, or give back more in tax cuts. Thus informed, the public chose the former in large numbers. They want a recovery in services.

IMF Post-Program Monitoring Report on Ireland notes the unusual risk profile of the Irish banking sector

The IMF has released its latest post-program monitoring report for Ireland. What is notable in the report is how it highlights the still very-high-risk profile of the Irish banking sector, and the policy quandary regarding encouraging housing construction without endangering another Irish banking sector crash over the medium term. Despite a strong, three-year-long domestic economic expansion, Irish mortgage loans remain an unusually risky asset class.

Continue reading “IMF Post-Program Monitoring Report on Ireland notes the unusual risk profile of the Irish banking sector”

New research on households in long term arrears

Great work by Robert Kelly and Fergal McCann, pdf here, abstract below:

The resolution of the long-term mortgage arrears (those in arrears greater than one year; LTMA) crisis represents one of the key policy challenges in Ireland today. In this Letter we highlight the range of economic and demographic characteristics associated with the experience of LTMA in Ireland. Our analysis suggests that unemployment shocks, changes in mortgage affordability, the accumulation of non-mortgage debt, higher originating loan-to-value ratios and weak housing equity positions all have an important explanatory role. We also outline repayment patterns among households at differing levels of mortgage arrears. It is shown that in 2014, over three quarters of those in LTMA had continued increases in their arrears balances. This contrasts with those in the early stages of arrears, where less than half of all borrowers had arrears increases.