by Ronan Coburn | Oct 10, 2015 | Banking Inquiry 2014
Having just returned from a trip to the Land of Ice & Fire, that is Iceland – a country that is finally lifting controls imposed during its Banking Crisis management in 2008, I couldn’t escape the aura of regeneration, honesty & freshness that revealed itself during my stay. Earlier this summer, Katrín Júlíusdóttir the Icelandic Finance Minister announced the end of capital controls –or limitations on what people there can do with their money– imposed after the 2008 crash. While other countries are still suffering from flat inflation and badly behaved, but contrite bankers eye-balling Tribunals’ Investigators, Minister Júlíusdóttir has announced a 39 per cent tax on investors looking to take their money overseas. This summer Iceland imposed the tax to prevent it haemorrhaging money as it loosens bank laws imposed six years ago, when Iceland made the shocking decision to let its banks go bust. Rather than maintaining the value of the Krona artificially, Iceland chose to accept inflation in a lesson to leading global nations on Icelandic Economics. This pushed prices higher at home but helped exports abroad – in contrast to many countries in the EU, which are now fighting deflation, or prices that keep decreasing year on year. Iceland also allowed bankers to be prosecuted as criminals – in contrast to the US and Europe, where banks were fined, but chief executives escaped punishment. The chief executive, chairman, Luxembourg ceo., and second largest shareholder of Kaupthing, an Icelandic bank that collapsed, were sentenced in February to between four and five years in prison for market manipulation and economic fraud. “Why should we have a part...
by Ronan Coburn | Sep 8, 2015 | Banking Inquiry 2014, Topical in Irish Banking Sector, Tracker Mortgages' Scandal
Because of a series of Bad Calls made over the previous 15-years, in a Tsunami of reckless lending activities the exposures to Bank balance sheets became such that the majority of Tracker Mortgages were a major source of recurring business losses. This has been particularly true of Permanent TSB., and its enforced commencement of its Tracker Mortgage Redress Scheme. To counter-balance this, the Banks [collectively and individually] evolved a Customer Handling Strategy whereby affected Borrowers were cajoled, by-hook-or-by-crook to forfeit their rights as Tracker Mortgage Borrowers. As a direct consequence of being very deliberately inveigled into moving-off Trackers, without being appraised of their Rights as Consumers at the time, Borrowers (to date, and into the future) have been charged very substantial volumes of mortgage interest. Indeed it has been demonstrated that in the case of Permanent TSB., more than 22-affected Home Owners actually had to under a forced-sale of their Private Residences. Scale of Tracker Scandal: Recent media estimates indicate that what is now legitimately referred to as the Tracker Scandal is expected to cost PermanentTSB, alone at least €35m in reimbursements to customers together with an additional €20m in Central Bank fines. Such mortgages are a carry-over from the pre-2008 Banking boom when Irish banks could borrow virtually unlimited amounts from mainland European banks at or close to official ECB rates (see Previous Blog on Government & Banks acted in consort to fuel reckless lending). Those days are long gone, and Irish Banks have been caught ‘with-their-trousers-down’ but the tracker contracts remain in force, with the recently-released Central Bank statistics showing that 47% of all mortgaged owner-occupied...
by Ronan Coburn | May 1, 2015 | Topical in Irish Banking Sector
Borrowers may have compelling reasons for a forensic assessment of bank documents. Disclosures can assist in defending themselves, their families and their Assets against Bank actions. Or perhaps challenging the historical lending activities & of their banks in terms of Banks’ conduct in applying their own lending & securities policies. Asset tracing undertakings in family law cases can also necessitate such investigations. In certain cases fundamental irregularities may exist in bank documents to such an extent that (if disclosed) these may either severely curtail, or even prevent the recovery activities of Banks & their legal teams. A starting point, prior to forensic assessment of bank documents may be to obtain preliminary legal advice to ascertain if there is likely to be a positive Cost Benefit Analysis outcome. Then a potential Phase-1 action might be for the Borrower to present to their Lender, a Request for Disclosure Letter under Section 4 of the Data Protection Acts 1988 and 2003. This letter can compel the Bank to produce file copies of all lending securities documents, within 40-days of receipt of such a letter. There may be key items contained in the disclosed bank lending & securities documentation. After a Forensic Assessment by an independent Investigator (with appropriate experience in Banking Practices, and Institute of Bankers membership) – these may flag further action leading to a more structured bank forensic investigation. This in turn may assist in the achievement of a balanced & all encompassing negotiated full and final debt...
by Ronan Coburn | Apr 27, 2015 | Banking Inquiry 2014
Germany’s Deutsche Bank has been fined a record $2.5bn (£1.7bn) for rigging Libor, ordered to fire seven employees and accused of being obstructive towards regulators in their investigations into the global manipulation of the benchmark rate. The penalties on Germany’s largest bank also involve a guilty plea to the Department of Justice (DoJ) in the US and a deferred prosecution agreement. The regulators released a cache of emails, electronic messages and phone calls showing the attempts to move the rate used to price £3.5tn of financial contracts (meaning Loan Agreements for individuals and corporates globally). Deutsche Bank is a multinational business whose Net Worth is larger than the shrinking Greek economy. However look at the ‘calling to account’ of the Greeks versus the $2.5BN fine on Deutsche & then business-as-usual afterwards. This substantial fine is financed from Deutsche’s illegally generated revenues. Yanis Varoufakis @yanisvaroufakis FDR, 1936: “They are unanimous in their hate for me; and I welcome their hatred.” A quotation close to my heart (& reality) these days 10:49 AM – 26 Apr 2015 The Guardian reported Navinder Singh Sarao, the British financial trader accused of making $40m (£27m) by manipulating US stockmarkets and in the process contributing to the 2010 “flash crash”, invested £2m of his profits in a company linked to a former court of appeal judge, a City grandee, a pair of private equity tycoons and a media entrepreneur. The fresh details of how Navinder Singh Sarao’s trading profits appear to have filtered into more mainstream parts of the City have emerged after a week in which the previously obscure trader was propelled on to...
by Ronan Coburn | Feb 27, 2015 | Banking Inquiry 2014, Topical in Irish Banking Sector
Two years prior to the commencement of the Banking Crisis, the Irish Government was subjected to an intensive lobbying campaign by the Irish banking industry to change legislation in order to allow banks to borrow from new sources to lend on to customers. Irish banks, including the now disgraced Anglo Irish Bank and AIB, and large international banks including Depfa, which was nationalised in Germany, successfully lobbied the then finance minister Brian Cowen to amend the law. The 2007 amendment to the Asset Covered Securities Act 2001 widened the scope of the “covered bond market” in Ireland, through which banks sold bonds, or IOUs, that were backed by mortgages at the banks. Allegedly, the main aim of the campaign, orchestrated by the Irish Bankers Federation (IBF), was to prevent the loss of jobs and business in the Irish financial services industry to countries with more wide-ranging legislation governing bonds. The legislative changes, introduced at the peak of the boom, allowed banks to use commercial property loans as collateral for the bonds for the first time, enabling them to borrow more in the markets. This enabled Anglo, a commercial property lender, to access new sources of borrowings to fund the bank. Heavy borrowing in the global markets was one of the causes of the banking crisis and ultimately led to the ill-advised Government bank guarantee and the EU-IMF bailout. Letters released to The Irish Times, in early 2006 under the Freedom of Information Act show the intensity of the lobbying and the access the banks had to Mr Cowen. Offering his views on the legislation, the then chief executive of...
