Irish complaint about rivals in Brexit race for London’s business
DUBLIN SAYS OTHER FINANCIAL CENTRES ENGAGING IN ‘REGULATORY ARBITRAGE
IRELAND HAS COMPLAINED ABOUT LUXEMBOURG’S CONDUCT IN THE RACE TO LURE POST-BREXIT BUSINESS AWAY FROM THE CITY OF LONDON IN A SIGN OF THE INTENSE COMPETITION AMONG EUROPEAN FINANCIAL CENTRES.
Eoghan Murphy, the Irish financial services minister, has told the European Commission that rivals are engaging in “regulatory arbitrage”. Mr Murphy’s complaint was lodged on March 1, before Dublin lost out to Luxembourg in the race to be the location of choice for AIG. The US insurance company said last week it had decided to set up an operation in Luxembourg to secure its EU base after Brexit.
“We are hearing from various sources that companies are being offered certain incentives, that they are offering a back door to the single market, without the requirement to have capital to back up their entities in the European Union,” Mr Murphy told Reuters. Luxembourg dismissed Mr Murphy’s comments. “I didn’t expect the Irish to be sore losers,” said Nicolas Mackel of Luxembourg for Finance, the agency that markets the grand duchy as a financial centre. “There are plenty of good reasons that international institutions like AIG are choosing Luxembourg as their favoured location, including economic stability, international make-up, its central location and multilingual business culture.”
Mr Murphy raised concerns with Valdis Dombrovskis, the EU financial services commissioner, that there should be consistency in the way regulatory standards are applied across member states, against the background of the risk to stability in the European financial system. The heads of Esma and EIOPA, two key EU financial regulatory agencies, are believed to have raised similar concerns in recent days. In the aftermath of last year’s British vote to leave the EU, many in the insurance industry identified Ireland as a strong prospect for an alternative base to the City within the bloc.
Not only does Dublin have a similar legal system and is in the same time-zone, but it has long been considered a satellite of London for financial services. The Irish central bank increased its staff in anticipation of a deluge of interest from the industry. Beazley, one of the first groups to make its intentions clear, said that it would turn its Irish reinsurance subsidiary into a primary insurance business, and then use it as a base to sell products to the rest of the EU. Dublin is still on people’s radar.
The Central Bank of Ireland has been stricter than people thought it might be. They have moved from being a light touch regulator to being more serious Oliver Wareham Mr Murphy’s complaint suggests the Irish authorities are worried that their hopes of an influx of new insurance business to complement Dublin’s existing strengths in that sector may not materialise. “Dublin is still on people’s radar, but the Central Bank of Ireland has been stricter than people thought it might be. They have moved from being a light touch regulator to being more serious,” says Oliver Wareham, a partner at Slaughter and May, the law firm. Karel Lannoo, chief executive officer of the CEPS think-tank in Brussels, said he saw little legal scope for complaints, such as Ireland’s, for other countries to toughen up their own regulations.
“This is all about supervision,” he said. For insurers and investment funds, “regulation is harmonised in Europe, but supervision isn’t, and on these matters it’s up to the supervisor to judge”. Mr Lannoo also noted that the European Securities and Markets Authority, an EU agency in Paris working on “convergence” of supervisory standards, was not yet a powerful body. “They have peer pressure, nothing more,” he said, in comments echoed by an EU official.
Nama property deal ‘seriously deficient’, says watchdog
THE PUBLIC ACCOUNTS COMMITTEE SAID THE 2014 TRANSACTION WAS NOT WELL-DESIGNED AND ADVISER FRANK CUSHNAHAN SHOULD HAVE BEEN REMOVED
The biggest property deal in Northern Ireland’s history was “seriously deficient”, an Irish watchdog said.
The cut-price sale of almost 1,000 properties by Ireland’s state-owned bank for bad loans following the economic crash, the National Asset Management Agency (Nama), cost the Irish taxpayer 185 million euro.
The Irish Parliament’s Public Accounts Committee (PAC) said the 2014 transaction was not well-designed and Nama’s former adviser Frank Cushnahan should have been removed.
It also said key elements of the sale were influenced by one of the bidders, US firm Pimco, and the most active participants in the market for non-performing loans were not initially invited to compete.
The PAC report said: “The sales strategy pursued by Nama included restrictions of such significance that the strategy could be described as seriously deficient.
“Nama has been unable to demonstrate that by pursuing such a strategy that it got value for money for the Irish State in relation to the price achieved.”
Nama was established in 2009 to take control of billions of euro of bad property loans at home and abroad which were undermining the finances of the Irish banks.
The entire Northern Ireland portfolio was sold to Cerberus, a US investment fund manager, for £1.1 billion (1.23 billion euro) in a sale known as Project Eagle.
The report said Nama incurred losses on its Northern Ireland debts of 800 million euro from 2010 to 2014 and the state ultimately recovered only 36% of the original value of the loans.
A Nama statement disputed the suggestion an extra £162 million (185 million euro) could have been raised through Project Eagle and said the overall losses would have arisen whether the portfolio was sold or retained in 2014.
A spokesman said: “It was the Board’s commercial and considered judgment, in full knowledge of the financial implications, that the sale of the Project Eagle loan portfolio provided a better financial outcome than any alternative monetisation strategy.
“That was the Board’s view in 2014 and it remains the Board’s view today.”
Businessman Mr Cushnahan was a member of the Northern Ireland Advisory Committee (NIAC) to Nama.
During 2011 and 2012 he admitted providing financial consultancy services, mainly on a non-fee basis, to six Nama Northern Ireland debtors.
PAC chairman Sean Fleming noted: “These debtors’ connections accounted for approximately 50% by value of the Project Eagle loans.
“It is the opinion of the committee that Nama’s failure to effect Mr Frank Cushnahan’s removal from NIAC, following his disclosures in relation to consultancy services on behalf of a number of Nama’s Northern Ireland debtors, was a failure of corporate governance by Nama.”
Mr Cushnahan has consistently denied any wrongdoing.
According to the PAC chairman, when the Nama board was deciding to set its minimum price for the sale, it already had an indicative offer on the table from Pimco.
He said: “I believe that Nama was influenced by the Pimco offer when deciding on the minimum reserve price and key elements of the sales process.”
Have the Irish given up on owning their own homes?
THE NUMBER OF PEOPLE BUYING RATHER THAN RENTING HAS FALLEN TO A NEAR 50-YEAR LOW
BERLIN, WHERE JUST ABOUT 14% OWN THEIR OWN HOMES COMPARED TO ABOUT 60% IN DUBLIN.
We may look to Boston when it comes to business, but when it comes to home ownership, it’s another story. While we might not be looking to emulate Berlin yet, we have definitely become more akin to a small German state. An analysis of home ownership trends shows that the Irish are becoming ever more European, as the number of people buying rather than renting a home has fallen to a near 50-year low.
According to unpublished figures from the Central Statistics Office, which it compiles as part of its Quarterly National Household Survey, Irish society has changed significantly in the past 16 years. People are turning away from the dream of owning their own homes in favour of the flexibility – and uncertainty – of the increasingly tough rental market.
But why have the Irish scaled back their dreams of owning their own plot of land? Should we care about this? And what is the future likely to hold?
Home ownership figures?
Irish people’s living arrangements have become decidedly European in recent years. Home ownership reached a peak at about 80.1% in 1991, one of the highest rates of home ownership in western Europe at the time, with just 8% of households renting privately in that year.
However, soaring property prices in the boom years, a sharp rise in the demand for rented accommodation on the back of tax breaks and an influx of investors into urban regeneration projects means that ownership figures have been on a downward trajectory since. And the years of dicing with economic collapse followed by a slow recovery have done nothing to reverse the trend.
Back in 2000, for example, four out of every five people in Ireland lived in a home they owned, with just 7% of the population renting privately, and the remainder largely renting from a local authority.
Fast forward to the epoch of the crash, 2008, and a sharp increase in property prices meant that the figure had fallen to just three in every four people living in a home they owned. By 2015, this had slumped to 71%, and to 69.7% by the end of 2016.
The last time we saw figure this low was in the late 1960s, a time when studies show that State incentives meant that almost a third of the cost of a standard suburban house could be recouped from grants, helping to boost home ownership levels in the subsequent years.
Given such a downward trend, it’s possible that within a few years, as few as two-thirds of the Irish population could live in a home they own – a stark contrast to the years when home ownership was a legitimate goal for most Irish people.
At the same time, the population of renters has soared, driven by immigration and population trends as well as home ownership trends. The figure has jumped from 7%, or 270,000 people in 2000, to 18%, or 843,000 people by 2016.
With an extra 573,000 people looking to rent, it’s little wonder we are in the midst of a rental crisis.
Dublin renters
This trend is most notable in the capital. Back in 2000, almost 75% of people living in the capital lived in a home they owned, while just 10% of people rented a property. Since then however, the numbers of homeowners has fallen substantially, dropping beneath 60% for the first time in 2016. Just 59.6% of Dublin-based residents owned their own home in the third quarter of 2016.
This means that the numbers looking to rent have multiplied – up from 10% of population (110,000 people) in 2000 to 25% (328,000 people) as of end 2016.
For John McCartney, an economist with Savills, some of the demand for housing was funnelled from home ownership into rent. This is especially so as immigration into Ireland increased. Migrants typically opted to rent, rather than buy, a home.
The International trend?
But Ireland is not alone in seeing home ownership rates decline. It’s a trend that is happening elsewhere. Last year home ownership in the US fell to the lowest in more than 50 years, down to 63%, while home ownership in Britain is at a 30-year low of 64%, the lowest figure seen since 1986. PwC suggests that the rate is expected to drop to less than 60% by 2025 in Northern Ireland.
In an Irish context, it means, for example, that more people now own their own homes in parts of Germany, which is known as a nation of renters, than in Dublin. In coal-rich Saarland, for example, which has Saarbrucken as its capital, some 63% own their own home, compared with fewer than 60 per cent in Dublin, although we’re not yet anywhere near a city like Berlin, where as few as 14% of residents own their own homes.
The question is whether or not people are choosing to stay in rented accommodation or whether a combination of uncertain jobs and rising house prices is keeping them out of the housing market.
What is driving the trend?
A number of factors appear to have combined to make it more difficult to secure home ownership.
Younger buyers constrained by insecure jobs, inadequate savings and mortgage rules are taking longer to get on the ladder. The average age of today’s first-time buyer is 34 – a big advance on the typical age of 29 a decade ago.
Access to credit and mortgage-lending rules, introduced in 2015, have also been a factor.
“Mortgage lending restrictions weren’t binding in other parts of the country but they were binding in Dublin, so it was harder to buy houses in Dublin,” notes McCartney.
Also, more people are single today than in previous generations, which in itself makes it more difficult to get on the housing ladder. For example, the number of “small” household units of one to two persons rose significantly between 2009 and 2013, and most of this increase was noted in Dublin.
Given that owning your own home is cheaper than renting in many parts of the State, even in Dublin, one might expect the slide not to be so significant.
Affordability, for example, has remained stable in recent years; the EBS DKM affordability index shows that a working couple now needs to spend 21% of their after-tax income on mortgage repayments, down from 32% in 2007.
Moreover, a survey from Daft.ie last year found that, in the capital, owning a one- or two-bedroom property was cheaper than renting, as is a three-bedroom home in west Dublin. So one possible conclusion could be that people are finding it difficult to get the funds together for a deposit on a home, rather than the wherewithal to pay the mortgage itself.
Of course it could also be a case that people have fallen out of love with the ideals of home ownership. Younger people may prefer the flexibility that renting offers; their older counterparts may have been burned by negative equity and arrears in the fall-out of the boom years.
Should we as a society care?
The question then, if home ownership rates are slipping, should we, as a society, as an economy, care? The main economic argument for home ownership is that, in the words of Thomas Shapiro of Brandeis University, “it is by far the single most important way families accumulate wealth”.
A US survey in 2013, for example, found that a typical homeowner’s net worth was $195,400 (€184,280) while that of renter’s was just $5,400.
This is particularly true in Ireland. As McCartney notes, Irish people have a relatively low savings ratio because the mortgage has proven a de facto method of accumulating wealth over time.
This approach sees someone buy a house in their 20s or 30s, paying off their mortgage and retiring at the age of 60 to 65, then living rent free for the rest of their lives on a pretty modest pension.
“It’s pretty deeply embedded and is a pretty good workable system,” he says. “But this gets disrupted if you’re going to be renting for a longer portion of your life. How will you pay for accommodation costs when you retire?”
Those of us dependent on defined-contribution pensions to fund our retirement will struggle to live on these as it is, given current inadequate funding levels. If we have to pay rent as well, many of us could be looking at poverty in our senescence.
“We’re not really set up for long-term renting; there would need to be some pretty fundamental cultural shifts in terms of how ordinary households plan their finances through their life cycle before it could become a mainstream possibility,” says McCartney.
In countries such as Germany, rental markets are subject to much greater regulations which can help protect pensioners.
On the other side, given experiences post-boom, it could be argued that home ownership is only really beneficial when it is able to withstand shocks.
The outlook:- “An improvement”?
It could be that, to pardon the pun, a floor has been reached in falling home ownership figures. Mortgage approvals have jumped in the wake of the Governments’ Help to Buy scheme and looser lending rules, increasing by 41% in the three months to the end of January, as first-time buyers flocked to get loans.
“There is a distinct possibility that the size of rental market has peaked,” says McCartney. If this is the case, we could expect to see the overall trajectory of home ownership trends reverse once more.
Your kids aren’t killing you because one day they may actually help you live longer?
SOMETIMES AND A LOT OF TIMES IT DOES FEEL AS IF BEING A PARENT IS SHAVING YEARS OFF YOUR LIFE, BUT A NEW STUDY SUGGESTS THAT’S NOT THE CASE.
In fact, just the opposite may be true?
In a paper published Monday in the Journal of Epidemiology and Community Health, a team of Swedish researchers report that having kids is associated with an increase in life expectancy, especially as we age.
According to the new work, 60-year-old women with children had a remaining life expectancy of 24.6 years, compared with 23.1 years for those who do not have children.
For men, the difference was even greater.
Sixty-year-old men with children were expected to live for another 20.2 years on average, whereas those without children were expected to live for an additional 18.4 years.
That’s nearly a two-year difference.
To come to these conclusions, the researchers used national registry data to track the life spans of more than 1.4 million Swedish men and women who were born between 1911 and 1925.
The researchers were also able to determine the marital status of the participants as well as how educated they were, and the number and sex of their children if they had any.
Previous studies had indicated that people who have daughters have a longer life expectancy than those who have just sons. To see if that was true, the researchers compared the life spans of participants with just one daughter to those who had just one son. According to their analysis, there was no difference in life expectancy between the two groups.
The authors also wondered if having an adult child who lives nearby would increase one’s life expectancy in older age. After crunching the numbers, they discovered this was not the case.
Indeed, it seems that parents 60 and older who live more than a 30-minute drive away from their children had a slightly smaller risk of dying within the year than those who lived closer to their children.
This finding may seem counter-intuitive, but the authors note that previous studies have shown that highly educated children are more likely to live farther away from their parents. They suggest that it is possible that having a well-educated child might have a greater effect on one’s chances of survival than proximity.
The results of this work are purely observational and cannot be used to draw any conclusions about why they see the effects reported in the study, the authors said.
They also said it is possible that adult children may offer various types of help to their aging parents. For example, physical, social and emotional support all might increase a person’s life span.
The study may be particularly significant in places such as Sweden and other Nordic countries where childlessness is on the rise, the authors said. By understanding what it is that having a child offers an aging parent, it might be possible to provide similar services to those who chose not to have children.
‘It frightened the life out of me’: Mary Boyle’s mother has been sent hate mail
Saturday marks the 40th anniversary of Mary Boyles’s mysterious disappearance.
Mary Boyle (left) as she looked at six years? Anne Boyle today.
MARY BOYLE’S MOTHER ANNE HAS RENEWED HER APPEAL FOR INFORMATION ABOUT HER DAUGHTER’S DEATH ON THE 40TH ANNIVERSARY OF HER DISAPPEARANCE.
Mary was just six years old when she vanished while visiting her grandparents in Cashelard, Ballyshannon, Co Donegal on 18 March 1977. No trace of her has ever been found since.
Her disappearance is Ireland’s longest-running missing person case.
Speaking to RTÉ’s Prime Time tonight, Mary’s mother Ann Boyle said she believes her daughter made it to the nearby road which links the townland of Cashelard with Belleek in Co Fermanagh on the day she disappeared.ary Boyle
Mary’s twin sister Ann Doherty has previously said she believes Mary was murdered and has called for an inquest to be held, while her mother – also called Ann – does not want this. Prime Time said Ann Doherty declined to be interviewed for tonight’s programme.
“I’ve begged to know for 40 years what happened to Mary. I don’t want an inquest that Mary is dead. I want to believe that Mary is still alive somewhere. I have to live that way,” her mother said.
Ann’s granddaughter Mary Duffy also spoke to Prime Time.
“It’s very sad to think this is the place Mary went missing. It’s sad because I never got to meet Mary, and you just feel a sense of loss because this is where she was,” she said.
ANN ALSO SPOKE ABOUT RECEIVING HATE MAIL IN RECENT TIMES, RECALLING:
One was a Christmas card and the other was a letter, and the stuff that was in it was shocking – that threatened my life, and frightened the life out of me. One of them started off like it was from Mary. I mean, my God. That made me ill … I wasn’t able to cope with it, I just threw it away.
Her granddaughter Mary said the hateful mail was very distressing for her grandmother, stating: “It’s horrible and nanny’s afraid to be in her own home and no one should be left like that, it’s horrible.”
IMAGES OF CLOTHING.
Gardaà have released images of clothing similar to that worn by Mary when she disappeared four decades ago, a lilac-coloured cardigan and black wellington boots.
Her twin sister Ann wore identical clothes that day, and those images were shown on Prime Time tonight.
Chief Superintendent Walter O’Sullivan of the Serious Crime Review Team said a full review of the case is currently being undertaken, and seeks to identify every person who was in Cashelard on the day Mary disappeared.
“Although a rural area, there would have been a number of people in the area, living there, farming, visiting, driving through.
When a child goes missing it goes right into the heart of a community, it struggles to understand why this has been visited on their community. The community has provided information confidentially, anonymously and through making statements.
“I believe there is further information to be obtained and I am appealing for people to come forward ” O’Sullivan said.
The oldest fossil plants on Earth discovered in India.
THE ORIGINS OF PLANTS MAY GO BACK HUNDREDS OF MILLIONS OF YEARS EARLIER THAN PREVIOUSLY THOUGHT, ACCORDING TO FOSSIL EVIDENCE.
Ancient rocks from India suggest plants resembling red algae lived 1.6 billion years ago in what was then shallow sea.
The discovery may overturn ideas of when relatively advanced life evolved, say scientists in Sweden.
They identified parts of chloroplasts, structures within plant cells involved in photosynthesis.
The earliest signs of life on Earth are at least 3.5 billion years old.
The first single-celled microscopic life forms evolved into larger multi-cellular eukaryotic organisms (made up of cells containing a nucleus and other structures within a membrane).
Therese Sallstedt of the Swedish Museum of Natural History discovered some of the fossils. She described them as “the oldest fossil plants that we know of on Earth in the form of 1.6 billion year old red algae”.
“They show us that advanced life in the form of eukaryotes (like plants, fungi and us humans/animals) have a much deeper history on Earth than what we previously have thought,” she told BBC News.
THE TREE OF LIFE
The scientists found thread-like fossils and more complex “fleshy” colonies in sedimentary rock from central India. Both have characteristics of modern red algae, a type of seaweed.
Co-researcher Prof Stefan Bengtson of the Swedish Museum of Natural History added: “You cannot be 100% sure about material this ancient, as there is no DNA remaining, but the characters agree quite well with the morphology and structure of red algae.”
The oldest known red algae before the present discovery date back 1.2 billion years. The Indian fossils are 400 million years older, suggesting that the early branches of the tree of life began much earlier than previously thought.
Claims of ancient life are always controversial. Without DNA evidence, confirmation must rest on whether more fossils can be found.
There is also debate over whether red algae belong in the plant kingdom or in a class of their own.
Modern red algae is perhaps best known for two commercial products – gelatinous texturing agents used in making ice cream – and nori – the seaweed used to wrap sushi.
