The Central Bank has published up-to-date information on senior and subordinated bonds outstanding at the six Irish credit institutions covered by the ELG. The release is available here. The numbers are broadly consistent with those reported in the widely cited February 11th report from Goodbody Stockbrokers.
Category: Banking Crisis
Governor Honohan gave a substantial interview to Richard Crowley on Prime Time last night (available here). The interview covered many of the economic and banking topics debated on this blog in recent weeks and months. If you didn’t get a chance to see it live, it is essential viewing. The interview is preceded by a report by Donogh Diamond and followed by a panel discussion with Cliff Taylor and Stephen Collins. The interview itself starts at minute 8:20 and ends at 27:35.
Here‘s a column I wrote for Business and Finance on the challenges facing the new government.
The draft legislation for a permanent special resolution regime for failing banks has been published (see here). The proposed legislation would replace the much-criticised emergency Credit Institutions (Stablisation) Act passed in December.
From a quick reading, the legislation appears a significant improvement on what it would replace. The Governor of the Central Bank rather than the Minister for Finance makes the decision to trigger the regime. The new legislation has well-defined triggers (Section 8), though it appears to leave a large amount of discretion with the Governor and lacks quantitative targets. There also appear to be reasonable provisions for creditor protection (e.g., the possibility to appeal to an independent valuer when forced transfers of assets or liabilities take place (Section 31)). I would be interested to hear opinions on whether these protections are sufficient.
Strangely, according to the Irish Times, the new legislation might not come into effect for domestic institutions until the end of 2012 (see here).
The legislation will not immediately apply to domestic institutions but covers all other banks authorised in the State, foreign owned subsidiaries and banks operating in the IFSC.
Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Nationwide, EBS and Irish Life and Permanent are covered by the Credit Institutions (Stabilisation) Act which was introduced late last year.
The objective of the new legislation is to shift the Irish institutions falling under the Credit Institutions (Stabilisation) Act to being covered by the Central Bank and Credit Institutions (Resolution) Bill before the end of 2012.
Update: Some additional useful links:
Simon Carswell gives his reaction here. Suzanne Lynch provided a good overview of special resolution regimes after the emergency bill was published in December. As linked to many times on this site before, Peter Brierley provides an indispensible international comparison of SRRs, with a focus on the UK’s regime. The original emergency legislation — which remains in effect until the end of 2012 — is available here.
The latest quarterly report on mortgage arrears from the Central Bank is available here. The report shows a continuation of the steady increase in the fraction of mortgages that are more than 90 days in arrears. This fraction rose from 5.1% in September to 5.7% in December, in line with the previous increases over the past year.
For the first time, the Bank are also publishing statistics on how many mortgages have been restructured and the nature of these restructurings. In addition to the 44,508 mortgage accounts that were in arrears for more than 90 days, there are 35,205 mortgages that have been restructured but which are classified as performing and not in arrears.