ECB to simplify European bad loan definition in pending health checks
Fireworks illuminate the sky around a huge euro sculpture, designed by German artist Ottmar Hoerl, in front of the headquarters of the European Central Bank (ECB) in Frankfurt, January 1, 2002. UNICS
(Reuters) – The ECB is set to allow the euro zone’s top banks to meet less stringent definitions for bad loans than previously planned when it makes an unprecedented review of lenders’ balance sheets this year.
The 128 lenders under scrutiny by the European Central Bank were allowed to apply the softer “simplified definitions” for bad loans in their first data submissions for the asset quality review (AQR).
Two sources with knowledge of the matter said the banks, which will come under ECB supervision later in 2014, will be able to use the easier definitions for the rest of the assessment too.
An ECB spokeswoman said the issue was still being discussed and a decision was expected soon.
Some at the ECB had hoped to apply the full definitions rolled out by the European Banking Authority (EBA) in October, for assessing when loans go bad and the impact of restructured loans. However, many banks cannot adapt to the new guidelines in time for the review.
The compromise takes some shine off the ECB’s exercise, which is meant to show investors that euro zone banks have cleaned up their balance sheets after years of crisis and are now fit to support economic recovery.
Even so, applying a minimum standard is still more rigorous than using national definitions, which make it hard to draw up cross-border comparisons and raise the risk that banks could hide problems behind domestic obscurities.
The EBA defines a loan as non-performing when a repayment is more than 90 days overdue or when repayment is unlikely. A second rule defines when forbearance on a loan has taken place, meaning the bank has allowed the borrower to skip or reduce payments. The rules will become binding at the end of the year.
A simpler version of them would mean skipping certain criteria for the time being, such as accounting for the wider impact once a company defaults on a loan.
The ECB will publish more details of the AQR and the EBA’s stress test at the end of January or early February.
Only 18% of Irish firms allow their employees unrestricted access to social media platforms like Twitter etc
Just 18% of Irish firms allow unfettered access to social services such as Twitter, LinkedIn and Facebook at work, according to new research from Amarach and McCann Fitzgerald.
The survey of 250 firms found that 48% of companies in Ireland allow limited access to social media at work, while a further 18pc block it altogether.
Among ‘business leaders’, Facebookis the social media channel of choice, with 37% using it daily. This compares to just 14% using LinkedIn daily and 15% using Twitter daily. Twitter is the least used major social media service among Irish business leaders, with 50% reporting no account.
Despite the moderate access to social media for staff, Irish companies are starting to take social media seriously as a business channel. According to the Amarach research, 63% of firms here categorise social media as “very relevant” or “somewhat relevant”. Asked why, almost half said it was useful for advertising, while a quarter said it could be used for communicating directly with customers. Just 20% regard social media as “irrelevant”, according to the research.
Meanwhile, a majority of Irish companies expect to move sales online this year, with over half predicting at least 10pc of their revenue from internet trade in 2014.
The online sales trend marks a shift in attitudes from Irish companies, which have been reluctant to invest in internet trade channels up to now.
In 2013, 69% of Irish companies recorded less than 10% of sales online, according to the Amarach. However, that figure is set to fall to just 49% this year, according to the same companies.
And while 47% of Irish companies took in no sales at all online last year, just 35% of Irish firms intend to stay away from internet sales this year.
Meanwhile, the number of Irish companies measuring between 10pc and 50pc of sales online will jump from 23% to 31% this year, according to the research. 7% of Irish firms will record over 70pc of their sales online this year.
Among business sectors, smaller companies expect to see a larger share of online sales than corporate firms. A third of hospitality sector sales will be online, according to the research, while 40% of sales from firms selling mostly overseas will be over the internet.
Irish Health Service will struggle to meet budget demands says Minister Reilly
Health Minister James Reilly has said the HSE’s budget restrictions for 2014 represented an unprecedented challenge for the Irish health system.
He told the Oireachtas Health Committee this evening that significant improvements had taken place in productivity and services in health against a background of a 20% cut in health spending in recent years.
At the Committee hearing, HSE Director General Tony O’Brien denied that there was provision for €1 billion in health cuts this year, even though the two deficit and savings figures stated amount to well over this amount.
He admitted that some service priorities and demographic pressures may not be met, and it would not be possible this year to meet fully all of the growing demands on our health services.
Mr O’Brien said the planned €108 million in unspecified pay savings would be brought about through flexibility measures under the Haddington Road pay agreement, and there would be no additional measures other than those already agreed under Haddington Road.
The Committee was told there there was a savings target of €619 million identified for the HSE this year, in addition to an underlying projected deficit of €419 million.
The original savings target for the medical card scheme had been reduced from €133 million to €23 million, the Minister said.
He said following a review he had initiated, it was found that the original probity target had not taken into account the extent of savings that already had been achieved or could be achieved through medical card applications scheme centralisation and probity measures without changing the current guidelines for medical cards.
He said the previously quoted probity savings figure of €113 million had been based on an estimate in a PWC consultants’ report of €65 million to €210 million in possible savings, but this figure had been ‘indicative and speculative’.
Minister Reilly denied that medical cards were being indiscriminately withdrawn.
He admitted the wording of the draft HSE service plan had been changed prior to its publication before Christmas, but this was because it had been possible to agree additional funding of €47 million at cabinet committee level.
Mr O’Brien also admitted the version of the introduction of the draft service plan that existed prior to it going to the cabinet committee had been changed. He said the reference he had made in the draft plan to critical service pressures had been deleted after it emerged that this risk no longer existed following decisions made on the health budget at cabinet committee.
Minister Reilly said a number of reform measures would be progressed this year, including ‘money follows the patient’, where hospitals would be funded based on activity levels, the interim establishment of a patient safety agency, and the reorganisation of hospitals into groups.
Mr O’Brien said there was an underlying projected deficit of €419 million for the HSE in 2014, in addition to the €619 million savings target for this year. The key message is that patient safety isparamount, he said.
Fianna Fail Health spokesperson Billy Kelleher told the Committee that the health service was facing an overall reduction of over €1 billion this year. However, Mr O’Brien denied there were cuts of €1 billion, but there would be a ’swing’ of this amount.
“The health service is facing a very significant financial challenge in 2014. This challenge comes at a time when the demand for health services is increasing every year, which in turn is driving up costs,” Mr O’Brien told the Committee.
HE TOLD THE COMMITTEE HEARING ON THE HSE’S 2014 SERVICE PLAN THAT SAID SAVINGS MEASURES TO BE IMPLEMENTED INCLUDED:
- A reduction in the lump sum provision for pensions which will be used to offset, in part, theincoming deficits from 2013.
- Making use of savings which will accrue from the phased implementation of new developments during 2014.
- Additional savings targets of €129 million in areas such as procurement (€30 million), shared services (€10 million), value for money initiatives (€10 million), hospitalreconfiguration (€7.5 million), energy efficiency savings (€15 million) and ’full delivery of costcontainment plans of €56.5 million for hospitals’. Hospitals also have to deal with a ‘run-over’ deficit of €190 million from last year.
Mr O’Brien said other measures would include pay and flexibility reductions totaling €268 million, of which Haddington Road would facilitate up to €140 million – €108 million of this related to ‘unspecified savings’.
He said if the unspecified savings figure was not achieved, there was no mechanism in Haddington Roadd to seek cuts elsewhere. If the pay savings were not acheived, there was a process within Government to have those issues addressed.
Sinn Fein Health spokesperson Caoimhghin O ‘Caolain said there had been no additional fundingmade available this year for nursing home places.
Mr O’Brien said the reduction in the health service budget between 2008 and 2013 amounted to €3.3 billion and when coupled with reductions in 2014, the total budget reduction over six years amounted to almost €4 billion.
What is the secret to the Human beings longevity?
Human beings and other primates have an extremely slow metabolism rate. They burn almost 50 percent fewer calories each day than other mammals, which is why they have a longer lifespan, say scientists.
The key to longevity is a slow metabolism rate, say scientists.
Humans and other primates burn 50 percent fewer calories each day than other mammals and due to their low metabolism rate, they have a longer life span, according to a paper published in the Proceedings of the National Academy of Sciences.
Overall, 17 primate species, such as humans, gorillas, and mouse lemurs were examined for the purpose of the study.
The international group of scientists who carried out the study worked with animals in zoos, sanctuaries in Africa, and in the wild.
Daily energy expenditure of the primates was calculated using a technique called “doubly labeled water,” Herman Pontzer, an anthropologist at Hunter College in New York and the lead author of the study, told The Monitor.
Water contains hydrogen and oxygen. Some of the hydrogen and oxygen in the water were being replaced with their variants, also called isotopes, Dr. Pontzer says. After animals drink water, these isotopes would then act as tracers and their presence could be found in their urine. By determining the concentration of isotopes from the urine sample, Pontzer and his team determined how much carbon dioxide the body produced. Over a 10-day period, scientists measured the number of calories primates burned, says Pontzer.
Comparing the results of the experiment with similar data from other studies, the team compared daily energy expenditure among primates to that of other mammals, according to a press release by Chicago’s Lincoln Park Zoo. Chimpanzees and gorillas from the zoo were examined for the study.
“The results were a real surprise,” said Pontzer. “Humans, chimpanzees, baboons, and other primates expend only half the calories we’d expect for a mammal. To put that in perspective, a human – even someone with a very physically active lifestyle – would need to run a marathon each day just to approach the average daily energy expenditure of a mammal their size.”
The findings present an alternative explanation and help to look at the slow life history of primates differently, Steve Ross, coauthor of the paper and the Director of the Lester E. Fisher Center for the Study and Conservation of Apes at Chicago’s Lincoln Park Zoo, told The Monitor.
It was earlier believed that primates have a slow life history because they do not invest their energy in growth; instead they allocate energy towards development and maintenance of their brain, Dr. Ross says.
“The environmental conditions favoring reduced energy expenditures may hold a key to understanding why primates, including humans, evolved this slower pace of life,” said David Raichlen, an anthropologist at the University of Arizona and a coauthor of the study in a press release by Chicago’s Lincoln Park Zoo.
The study has major implications for understanding how evolution has shaped human metabolism and why human beings differ from their ancestors, says Pontzer. He added, “It can also help us to better understand obesity and other metabolic diseases.”
How transparent is Irish Water?
The Fianna Fáil party makes a strong argument in its latest video offering on the controversy.
Fianna Fail has produced a video to highlight its concerns about how Irish Water established itself within Bord Gáis.
Uploading the clip to YouTube, the Opposition party described it as “random selection from the document released to explain why Bord Gáis was chosen as home for Irish Water despite advice from independent experts”. The 39-second video shows a number of almost-completely redacted pages of text.
Earlier today, the Public Expenditure and Reform Minister Brendan Howlin confirmed that the new State utility will be brought “fully” into Freedom of Information.
“All the documents pertaining to Irish Water should be available to public scrutiny,” he said at a press briefing.
Information can still be redacted for commercial sensitivity purposes.
Irish Water today insisted that it awarded all of its contracts in line with EU rules on procurement. It also noted that it wanted to ensure transparency and value for money throughout the setting up process.
CEO John Tierney is due to face questions from the joint Oireachtas Environment Committee this afternoon. Irish Water has been subject to scrutiny over the past week after it emerged that it had spent €50 million on consultancies. That figure is now expected to jump to €86 million of its entire €180 million set-up budget.
Scientists brace themselves for the incredible sight of a black hole swallowing a gas cloud
Scientists around the globe are bracing themselves for what could be the best view yet of the black hole ahead of its collision with a gas cloud.
The black hole, called “Sagittarius A*”, could provide a stunning series of galactic fireworks if it collides with the gas cloud – which has a mass about three times that of Earth – currently heading in its direction.
First identified by German scientists three years ago, they originally believed the collision would occur last year. However, astronomers have predicted that the collision will now happen sometime in March.
The gas cloud, dubbed “G2″, is expected to travel so close to the black hole that it will cause it to heat up and create a chain of sensational bright lights.
Many scientists are eagerly anticipating the event due to the educational value of the experience, with information about the gravitational effects of the hole and the extent of its power likely to be revealed.
Sagittarius A* is one of the dimmest black holes of the supermassive variety – which are much less visible than other black holes – so the event could provide the opportunity for a better viewing for scientists in the future.
Jon Miller, an associate professor of astronomy at the University of Michigan, said: “I would be delighted if Sagittarius A* suddenly became 10,000 times brighter. However, it is possible that it will not react much – like a horse that won’t drink when led to water.”
He added: “If Sagittarius A* consumes some of G2, we can learn about black holes accreting at low levels – sneaking midnight snacks. It is potentially a unique window into how most black holes in the present-day universe accrete.”
To give interested viewers a taste of what they can expect, astronomers have created a simulation of the events which they predict will happen in the spring.
