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 | 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...
by Ronan Coburn | Feb 6, 2015 | Banking Inquiry 2014, Topical in Irish Banking Sector
In February 2015, we are paying an eminent US expert on bank fraud to state that the Irish bank guarantee of 7-years ago was “the most destructive own goal in history”. It was reported, earlier today (6th February 2015) in www.theJournal.ie that Professor William Black, from the University of Missouri-Kansas City, said that the lack of “reliable facts” from regulators and banks in the lead up to the 30 September 2008 resulted in a blanket guarantee being issued. The inquiry also heard the European Commission’s Mario Nava this afternoon. Earlier, responding to questions from the Oireachtais banking Inquiry, Black said he could not understand the decision to guarantee subordinated debt (junior bondholders), saying later that “you would never ever bailout subordinated debt”. Black said the guarantee decision turned a banking crisis into a fiscal crisis “that was clearly gonna crush Ireland”. In soccer parlance, he said, this was “the most destructive own goal in history”. Not Irish history, but Global economic history. At various stages during his evidence, Black described the decision to issue a blanket bank guarantee as “insane” and said it “sunk an entire nation”. Supporters of the late Mr Lenehan try to claim that he was over-ruled on the night that the calamitous Guarantee was signed. Professor Black said that the assurances that the financial regulator gave about Irish banks being solvent prior to the guarantee was “preposterous” given what it knew. “Your regulators did an enormous disservice to the nation,” he said. rational Irish people will require every one of these individuals to be be called to account & appropriately penalised for their outrageous performance....
by Ronan Coburn | Dec 20, 2014 | Banking Inquiry 2014, Topical in Irish Banking Sector
This weekend Ulster Bank published the results of the review into practices at its Global Restructuring Group (GRG) in the Republic of Ireland (GRG) yesterday, 19th Dec 2014. The probe by law firm Mason, Hayes and Curran was commissioned in response to the Tomlinson Report, by UK businessman Lawrence Tomlinson. This firm provides legal & debt recovery services to UB., and its role in this undertaking is questionable & unconvincing. Lawrence Tomlinson was the UK Conservative Government’s Entrepreneur-in-residence (2013 – 2014). The Tomlinson Report [Banks Lending Practices: Treatment of Businesses in distress’ (2013)] had accused Royal Bank of Scotland’s (RBS) GRG unit of systematically charging small and medium enterprises large fees and ultimately (in several cases) of putting them out of business, at the expense of generating quick profit. Such quick profits were utilised to patch-up the respective troubled Banks’ balance sheets. However last month the UK Parliamentary Committee on Banking Standards publicly chastised Ulster Bank’s parent RBS., for the admittance that two senior executives quite deliberately misinformed the Committee earlier this year that it didn’t operated its Global Recovery as a Profit Centre. At the time of the Bank’s previous denial, it, instead maintained that it’s prime objective in setting up this division in 2008 (operated in parallel with its Parent Bank’s GRG) was euphemistically described by UB itself as setting out to “Restore , Refresh and Rejuvenate”. This alliterative-speak echoes the Walmart-esque sloganism of UB and RBS under the entirely discredited stewardship of Fred Goodwin . “What does securitisation do?It takes the profits that you get from holding a loan over a period and pulls a big chunk...
by Ronan Coburn | Dec 17, 2014 | Banking Inquiry 2014, Topical in Irish Banking Sector
The Commission of Inquiry has now been refused any assistance & cooperation from the European Central Bank. The investigation into, and postmortem on the Irish Banking crisis will also steer clear of scrutinising the biggest own-goal in the Financial History of the state, when on 28th October 2008 the Irish State guaranteed a dishonest & bankrupt domestic Banking industry that was aided & abetted by both Irish & European Regulators. To come across as a worthwhile & all-encompassing undertaking the Inquiry must grasp the nettle of ‘Regulatory Capture’. This is an elaboration of Light-touch-regulation. It is a theory (developed by George Stigler, Nobel lauriate economist) and subsequently recognised by Wall Street Bank Investigators. It describes a process by which Regulatory Agencies over-time, eventually come to be dominated by the very Industries they were charged with regulating. Regulatory Capture occurs when a Regulatory Agency, formed to act in the public interest, eventually acts in ways that benefit that same industry that it is supposed to be regulating, rather than the...
