Ireland’s banks not contributing to society says Matthew Elderfield
Banks in Ireland had been given a life-saving blood transfusion by taxpayers but returned the favour by charging customers more, the financial regulator has said.
The country’s top regulator, Matthew Elderfield, also accused the banks of not properly contributing to society.
His comments came on the day it emerged that Bank of Ireland is to push up the interest on credit cards by as much as 4 percentage points, in a move that will hit thousands of householders. Many struggling consumers are so short of cash they are using credit cards to juggle their finances.
The new rates, which will be between 0.7pc and 4pc higher, take effect from December 18 next. They apply to purchases on cards. The bank, which got €4.7bn from the taxpayer, said it had not raised rates since August 2011.
Mr Elderfield, who is also the deputy governor of the Central Bank, said banks faced the uncomfortable task of “telling the neighbours who donated blood to them that they need to charge them more as customers”.
The State has nationalised five of the six domestic banks — AIB, EBS, Permanent TSB, Irish Nationwide and Anglo Irish Bank– at an overall cost of €64bn.
Mr Elderfield said returning to profitability was one of the key challenges the banks faced.
“Progress on profitability will only be possible in the interim due to gradual repricing of assets to reflect the cost of funds,” he said.
That implied further interest rate hikes, he said.
Critical
AIB has announced two hikes in its variable rates in quick succession. Bank of Ireland has hiked its variable rate by 0.5pc, while Permanent TSB has signalled a rise in fixed rates.
Speaking at an event in UCC, Mr Elderfield said the banks were out of the “critical ward following radical surgery and an extensive transfusion of blood from the Irish taxpayer”.
But, he said, they were still not contributing properly to society as they should and remained weak.
However, the central bank deputy governor confirmed that Ireland may be close to removing the banking guarantee that makes the State responsible for deposits kept in the bailed-out banks, confirming earlier reports in the Irish Independent.
“My view, we are getting close to the position where the changing circumstances arising from successful implementation of the IMF/EU programme and the introduction of the banking union should permit the full removal of the government guarantee,” he said.
In a clear reference to speeches earlier this week calling on the banks to face up to their mortgage problems, Mr Elderfield said the banks should be able to cope with losses even if they fully faced up to the problem.
Lenders had set aside “prudent provisions” for bad loans and retained a “healthy buffer” of additional capital, he said.
Banks wouldn’t know whether they had enough capital to withstand ”extreme loss developments” until they worked out what they could recover or needed to restructure among troubled loans, he said.
Lenders may be encouraged to hoard reserves and restrict lending until a “case-by-case re-underwriting” of soured loans was complete, he said.
EU leaders agree new Euro-zone banking supervisor facility
EU leaders this morning agreed to the setting up of a new high-powered supervisor for eurozone banks – a vital step towards separating sovereign debt and State debt.
The agreement is a boost to Taoiseach Enda Kenny as he presses EU leaders to hold to their promises, including giving Ireland a bank debt deal.
But Enda Kenny chose not to specifically mention Ireland’s debt deal, instead urging his EU counterparts to stick to the overall commitments given at their last meeting in June, which incorporated the promise to ease the country’s €64 banking debt burden.
The law to set up the banking supervisor will be agreed upon by January and it will come into effect next year.
European Commission President Jose-Manuel Barroso said theEuropean Central Bank will have a “fundamental role” to play in the new set up.
“The new supervisor will be able to intervene, if necessary, in any bank in the euro area,” he said.
At a summit that finished up at 3am this morning, EU leaders also reiterated their commitment from June that it was “imperative” to break the link between sovereign debt and bank debt.
The banking supervisor must be in place before this can happen.
But there is still doubt over how the new EU bailout fund, the European Stability Mechanism, will be used to recapitalise banks.
And it could be some time before the banking supervisor has garnered sufficient trust among EU leaders to allow for the direct recapitalisation of banks.
German Chancellor Angela Merkel indicated she felt the supervisor would have to be in place for some time before agreeing to direct injection of ESM cash into banks.
Also, there is still a great deal of uncertainty in Brussels over what exactly the commitment given to Ireland to reduce the legacy bank debt burden actually means.
In other developments of value to Mr Kenny, international ratings agency, Fitch Ratings, signalled it may soon remove its negative view on lending money to Ireland, but an upgrade could be some way off.
And European Commissioner Olli Rehn said Ireland is “making progress” in negotiations on a bank debt deal.
Mr Kenny told fellow EU leaders that Europe had to show “a capacity for implementing agreements”.
He said the EU had to prove that when heads of government come to an agreement, they were then followed through.
The Taoiseach said this would lead to confidence, which leads to stability, which leads to growth.
Rather than getting a fresh statement on Ireland’s debt deal specifically, Mr Kenny is hopeful for agreement that the June 29th deal stands.
He also wants to see the other elements of that deal, such as a banking supervisor and growth pact, speeded up.
The Government’s theory is these other measures must be in place before the Ireland’s bank debt relief can be agreed.
Danske Bank chases TV Apprentice boss Bill Cullen for €8m
€8m Bill 
Apprentice TV boss Bill Cullen is being pursued by a Danish bank for more than €8.2m.
Danske Bank claims the businessman, who recently lost control of his final two car dealerships, owes the money for unpaid loans.
Yesterday it applied to Mr Justice Peter Kelly at the Commercial Court for leave to serve notice of the proceedings on Mr Cullen at his home at Osberstown House, Sallins, Co Kildare, after saying it had experienced difficulties serving the legal documents on him personally. Cullen is already reeling after receivers were appointed to his Glencullen Holdings earlier this month.
The company had operated car dealerships in Swords and Liffey Valley, but the appointment of receivers ended Penny Apples author Bill’s 55 years in the motor trade.
Yesterday Rossa Fanning, for the Danske Bank, said about four efforts to effect personal service over loans worth in excess of €8.2m had proven unsuccessful and he was seeking an order to allow service by ordinary post at his home.
Mr Justice Kelly granted counsel an order allowing for substituted service.
Earlier this month, 45 employees at Mr Cullen’s Glencullen Holdings were told Ulster Bank, which is owed an estimated €12m, had appointed receivers to the company to secure its loans.
Devastated
Mr Cullen, who is owed €19.5m, is the biggest creditor of Glencullen. The company’s latest accounts showed Mr Cullen also provided a letter of guarantee of €1.2m as security for the loans, plus assignment of a life assurance policy.
A decline in car sales this year, and other factors, led to Mr Cullen losing control of the business. In August, Mr Cullen lost the Renault dealership, having held the national franchise for the carmaker from 1986 to 2007.
At the time close sources said the businessman and his partner Jackie Lavin were “very sad” about the developments.
“He had fought tooth and nail to save the business,” a source told the Herald. Mr Cullen continues to retain control of the Muckross Park Hotel Cloisters Spa in Killarney, which he co-owns with Ms Lavin.
The businessman started out selling apples from a cart on Dublin’s Moore Street.
He went on to buy Renault’s Irish distribution rights in 1986 for just £1 and developed it into a multi-million empire.
After years of success he headed up TV3′s Apprentice programme but all of those he hired have now all gone on to further their careers elsewhere.
One former Apprentice Winner Steve Rayner told the Herald that he was “devastated” by his former boss’s troubles. “Bill is the nicest guy I have ever worked for,” he said.
With breast cancer breakthrough,one step closer to a cure
New research from The Cancer Genome Atlas, part of the National Institutes of Health, has identified the genetic mutations of four distinctive types of breast cancer.
Two years ago, Debbie Cabrera and her pink-clad supporters walked in the Susan G. Komen Race for the Cure in downtown Miami. She carried a sign: “My last day of chemo is Thursday.”
Six months earlier, Cabrera, then a 47-year-old single mom who had just started a new job as a marketing program manager, got a call from her radiologist. She was about to start a strategy meeting with her director. She stepped out of the conference room to answer the phone.
“You have cancer.”
As she went outside to gather her thoughts, she had already made the decision to fight.
“I looked up to the sky and said, ‘Hey, You save me and I’ll make sure everyone knows it was you.’ ”
Her oncologist, Dr. Stefan Gluck at the University of Miami, gave her a few treatment options, ranging from gentle and risky to harsh and thorough. Cabrera said she wanted the strongest science had to offer. Her doctor warned that it would be rough.
“It’s going to get you,” he said.
“It’s not going to get me. It’s going to heal me,” she responded.
Treatment for breast cancer has advanced enormously in the past two decades, propelled by the urgency of survivors and family members to find a cure. One in eight women in the United States will be diagnosed with breast cancer in her lifetime. Every 13 minutes, one of these patients dies.
A study published last month from The Cancer Genome Atlas, part of the National Institutes of Health, has identified four distinct genetic types of breast cancer, which could mean new targeted treatments for the next generation of breast cancer patients. The search for a cure is what inspires the walkers and runners in Saturday’s Komen Race for the Cure. Komen is the largest non-profit, non-governmental source of breast cancer research funding in the country.
Charles Perou, the lead author of last month’s study, has long been supported by Komen grants for his breast cancer research at the University of North Carolina at Chapel Hill. For this project, researchers examined the genetic profiles of 825 tissue samples from breast cancer patients. The tissue bank at the Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine contributed.
By discovering the genetic signatures of the four types of breast tumors, Perou’s study will help researchers explore possible cures more strategically. Scientists were already aware of the four kinds of breast cancer, but now they have identified the precise DNA mutations that cause protein production in cells to spiral out of control and become deadly.
Dr. Carmen Gomez, the director of the UM tissue bank and one of the study authors, said the findings will be especially important for women with one type of cancer: the Basal-like tumors that disproportionately affect women of African descent. Also known as “triple negative,” the Basal-like cancer is the only kind for which there are no targeted therapies, only chemo.
“Chemo is like a dynamite blast that kills normal proteins along with the bad. Targeted therapies are like a sniper that goes after the specific proteins that cause the tumors to grow,” Gomez said. “With what this study tells us about the genes that code for these proteins, we want to develop more effective targeted drugs.”
Simple blood test to warn women of cancer development ’20 years early’
A simple blood test can indicate a woman’s risk of developing breast cancer up to 20 years in advance, doctors believe.
Scientists have found that older women who have high levels of particular sex hormones are up to twice as likely to develop the disease as those with low levels.
Breast cancer kills 12,000 people a year in Britain and most diagnoses are in women over 50.
The scientists found that the women most at risk were those with high levels of oestradiol, which is the main form of oestrogen, testosterone, and a hormone produced by the adrenal gland called DHEAS.
The test could be used alongside other factors including family history to identify those at high risk, they suggested. Such women could receive extra screening to check for early stage cancer, or preventive treatment.
The researchers, from Harvard Medical School and the Brigham and Women’s Hospital in Boston, in the United States, came to their conclusions after looking back at the health of almost 800 women diagnosed with breast cancer between 1989 and 2002.
All had been through the menopause by the time the tracking study began in 1989.
The volunteers, part of the Nurses Health Study, had all agreed to have their blood taken and analysed at the start and the end of the two-decade project.
The researchers also looked at hormone levels in almost 1,600 women from the same group of nurses, who did not develop breast cancer.
They discovered that women in the top 25 per cent of levels for the three hormones were between 50 and 107 per cent more likely to have developed breast cancer than those who were in the bottom 25 per cent.
Dr Xuehong Zhang, an epidemiologist, said that the findings suggested that looking at hormone levels could “substantially improve our ability to identify high-risk women who would benefit from enhanced screening or chemoprevention”.
The team also discovered that having higher levels of the three hormones was linked to having more aggressive breast cancer, which either recurred or caused death.
In addition, they found that particular individual hormones were closely linked to particular types of breast cancer.
Women with higher levels of oestradiol were prone to hormone-receptor positive breast cancer, as were those with high testosterone levels.
Henry Scowcroft, science information manager at Cancer Research UK, said: “This intriguing conference report suggests that a simple one-off blood test could spot women at higher than average risk of breast cancer.
“It will be interesting to see the full results of the study when they’re finally published, but there’s a long way to go, and many questions to answer, before this could be used routinely in the NHS.”
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