Deposit Guarantee Scheme revamped to cover €100,000

The Deposit Guarantee Scheme has been revamped as of yesterday to cover any depositer in an Irish institution for up to €100,000 per person. This move is being done to help restore confidence in the Irish financial markets.

The scheme was created in the mid 90’s and throughout its history cover was never index linked or adjusted for inflation and therefore it never increased. The recent move is designed to restore confidence in the Irish banking system, however, there is one small oversight that Mr. Lenihan has omitted from the story, namely, the amount of money in the scheme.

Prior to this the scheme covered people for 90% of their deposit to a limit of €22,000. This meant that in effect you could only ever expect to get a maximum payout from the scheme of €20,000, this was amongst the lowest levels of cover in Europe and now, in a pen stroke we are one of the highest (only Italy covers more).

However, there is still that issue I mentioned earlier of the …

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FSA warns banks, but will the Irish Regulator follow suit?

The FSA (Financial Services Authority) has warned specialist lenders that it has extreme reservations over how they are handling some arrears cases which may ultimately end in repossession. They felt that many lenders were overly ready to take court action against borrowers irrespective of their individual circumstances and that they focused purely on regaining the arrears.

From a lenders perspective this is a concern, if the FSA starts to come out in support of people who don’t repay their loans it can spell disaster for the financial institutions who lent out the money in good faith, if there is a prevailing belief that ‘you dont’ have to repay because the government is behind you’ it will send out the wrong message and creating an ‘unwillingness’ to repay debts and that won’t stop with banks, it can permeate into many aspects of the economy, right down to companies not paying eachother. Thankfully, the FSA stopped short of saying that they would get behind people in arrears and instead tried to keep …

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Text message lending, an untapped market in Ireland?

There is an untapped market in Ireland for text message lending, a type of lending that is common in Finland and Sweden. Recent articles about ‘mobile lending’ focus primarily on the downside of it, because the fees for borrowing tend to be relatively high. How high? In some cases more than 1,500% which is extortionate, having said that it only comes out like this if you look at a flat fee (minimal lending fees apply) and work it out as an Annual Rate which is not comparing like for like.

How does mobile lending or text message lending work? You send a text message containing the amount you want, along with some personal information such as your address, personal I.D. number and your bank account number and this is enough to do a comprehensive credit check, if your credit record is clear then in many cases within three minutes you are approved and the money arrives in your bank account. The loan is totally unsecured.

Normally the loan has to be paid within a certain short period such as a …

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Lose your collusion… Irish Banks show just how little they care.

As George Bush once said ‘Fool me once, shame on you, fool me twice…shame…well you’re not gonna fool me twice’. Banks however have done this and so much more in the last few weeks that how it’s not front page news has me flabbergasted! Are the Irish public meant to really believe the picture we are seeing unfold? Apparently so…..

Let’s look at the picture so far and put it in a time-line, then we can look at that time-line and try to discern if it was sheer co-incidence or opportunism that has lead to the moves in the market.

Tuesday 4th December: Ulsterbank cut brokers income by 50%, no explanation, and done by email. It would be laughable if it were not so serious.

Tuesday 11th December: PermanentTSB announce brokers income will be cut, to be fair they gave a lot of warning, because of the size of PTsb this action kicked off an industrial dispute, nobody cared about ulsterbank but PTsb was a market giant.

Then came the waiting game, to see what the result of the industrial …

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The Banks want to issue a slap on the wrist to those pesky HedgeFunds!

Irish Banks are considering legal action against several hedge funds in the belief that they gave false information about them in order to drive down their stock price and therefore make money by short-selling their stocks. If the regulator didn’t hammer the banks for the several million euro that the Irish Consumers were ripped off of in various debacles from account fees to forex charges then why should they get involved in this row?

The Regulator is there to enforce proper conduct in the Irish market, if the hedge-funds in question are not based here (chances are their administration might be though) then they will have little recourse, further more, the Irish Banks should be levied more if the Regulator does get involved, Irish Financial institutions have to pay for 50% of the Financial Regulators budget requirements, if they are going to be called in as inter-company police then the levy on firms using them for that purpose should increase. …

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