ECB announce €200 Billion injection

The ECB have just announced a €200 billion plan designed to stimulate eurozone economies, it is unlikely though that Ireland will take part in any of the plan. It was unveiled earlier today by Jose Manuel Barroso, €170 billion will come from member states and the remainder will come from the European Budget and the European Investment Bank.

Ireland has no room for further fiscal stimulus at present according to the Department of Finance, the foremost issue with Ireland is (according to Europe and our own government) is to get our spiralling deficit under control. One aspect of the stimulus is that €5 Billion will be going towards building greener cars (maybe this is the big break the AirCar has needed!).

The EU are taking these measures to avoid further downturn and to do so with coordinated policy responses. In the USA they announced an $800 billion Dollar stimulus plan. Both LIBOR and Euribor rates fell which will …

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Intersted in going broke? Should banks raise interest rates?

I had the pleasure of being on Newstalk last week with Eamon Keane and during our brief chat I had mentioned that banks are lending out money cheaper than they can buy it, this was mentioned back to me by a client and he wanted to know if it was simply a slip of the tongue, because banks of course, do not lend money at a loss.

In fact that is precisely what is happening at the moment because the 3 month Euribor – which is the rate banks generally are buying their money at- is at 4.742%. Several banks are lending at less than this price namely NIB, Halifax, Bank of Scotland, Bank of Ireland and PTsb. So how is this happening? How can any CEO let their institution lend money at a price that will cause shareholder loss?

I suppose it’s down to a few factors, firstly banks don’t HAVE to buy money at the 3 month Euribor rate, they may be operating on the 1 month money which is currently selling at 4.349%, or they may be …

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What are the best mortgage rates? Mortgage Interest Rates explained.

What are the best Irish mortgage rates? What are interest rates and where do they come from? These are all good questions and in today’s post I hope to answer some of them.

Often I find that people call me and ask ‘what’s the best rate’ and then there is silence on the other end of the phone as they await an answer. The truth is that at any given time there is a ‘best mortgage rate’ out there, but normally there are restrictions surrounding it which inhibit the ability for most borrowers to avail of them.

We have come out of eight rate hikes which began at the end of 2005, and in an upward rate market people often feel that their old loan has become expensive, in fact it’s not necessarily the case that the ‘old loan’ is exceptionally dear, its that the rate market has gone up and therefore the cost of all loans has gone up, when we talk about the greater ‘debt burden’ that’s what we are referring to, because car loans, higher purchase, leases, …

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