Another Re-shuffle of the Cards for Fine Gael December 14, 2010

Yep – we’re an interesting situation alright – it would appear that the cards are being reshuffled every week.

From a partisan political point of view – we in FG are just interested spectators in the stalls eating popcorn looking on at the potential realignment of the left of centre irish political world. Finally, finally, after me banging on about here and at other places for the last 3 years – the left are showing a bit of unity showing some cop-on and going after the soft populist underbelly of FF – I’ve been waiting for this to happen for ages.

Sinn Fein have a real opportunity here – even more than the Labour party IMHO – its because they vaguely look like the young Fianna Fail – the Fianna Fail that got into power in the 1930s with the whiff of military chic, populist quasi socialist policies and platform, wrapped in the nationalist flag. its a potent mixture, especially in a country largely populated by moany whingy dreamers who think the world owes them a living, that adores gesture politics, and is desperately looking for the “stroke” or placebo that is going to get them out of the current mess consequence free. I dont think Gerry Adams is going to be much a star, positively or negatively for Sinn Fein this time around.

Fianna Failers I know are sh^ttin themselves at this – they’ve no more goodies to bribe the electorate with and they’ll only look silly trying to resurrect the bogeyman in the balaclava – for the majority of FFs centre left vote – that is no longer an issue now – for those for whom it is – they are starting and will be migrating in quite considerable numbers over to Lab and FG – the FF vote will be even further squeezed if SF continue to rise.

Labour are in a bit of bind – they’ve made a lot of hostages to fortune here – drift further to the centre and they’ll lose a lot of their left vote to SF and the various socialists outfits – drift a bit towards the Sinners and the public service vote and middle clas might take a fit of the wobbles and trickle towards FG – it will be interesting to see how Labour square this circle – their lack of coherent policy and non-committments was going to catch up with them some time.

For us in FG – our vote is pretty solid at about 30% – its not going to go very far in either direction from that – Sinn feins rise has secured that. people know where we stand – we’re the boring party poopers who dont drink – but we’ll still be expected to drive everybody home afterwards and come back and clean up after the party – seems to be our raison d’etre now.

As regards coalition partners – if we get 65 seats plus – which is well within our power now and FF get 20 odd seats – my preference would be for a coalition with the remmants of FF – it wont be popular – FF themselves probably would run a mile from it- it would death staring them straight in the face – but, long term, it would be the final nail in the coffin of FF – in This budget FF have kicked the can further down the road on a lot of issues – particularly property taxes and utility charges – these will have to come into force at some stage – for the good of our democracy because local government needs to be funded locally to have any power locally – FF are hoping that the populist outcry over this would set them up nicely to recover by 2016 – my preference would be to essentially handcuff FF to rear fender of the FG car and drag them along with us each step of the way on the rocky road that they have designed and built themselves – thus hopefully by 2016 – the economy will be in better shape – the dail and political system reformed , the senate either abolished or reformed- local government reformed and the IMF sent home with the country off life support and back on its feet again – we’ll get no thanks for it of course – such is the way for FG – but at least Lab and SF will sweep into power in 2016 and FF will be no more –

I’ve no fears for SF in government in 2016 – like FF they’ll be full of fire and brimstone in opposition but once they get behind the wheel, like all socialists, they’ll be out to prove to the markets that they can be even better capitalists than the right wingers – happens all the time – whether a coalition between themselves and labour would last is another thing – but it would be interesting and give the country a semblance of a left/right divide that it so badly needs and allowing the last of the Fianna Fail crony vintage of 1997-2011 drain out of the government and electoral systems.

Interesting times ahead indeed.

Edo 10. 12. 2010

Ireland’s Bank Whistleblower Calls Time on Government Regulation Failures – Is Anybody Listening ? December 5, 2010

In the last two years, the Office of the Director of Corporate Enforcement (ODCE), the Financial Regulator and the Gardaí have been engaged in a prolonged investigation of the Irish banks. As yet, no cases have been brought and some key players have not yet been interviewed. The latest obstruction of justice involves a number of apparently unobtainable Anglo Irish Bank computer file passwords.

http://www.politicalworld.org/showthread.php?t=2644&highlight=ODCE

How much easier, one would think, these enquiries would have been, if Ireland had had some banking insiders who would come forward and voluntarily given unvarnished evidence of what was going on inside the banking sector.

But we have had one whistleblower, who has reported a liquidity breach of 1,900 per cent, which he claims involved billions, to the Financial Regulator. He alleges that a series of breaches occurred in the IFSC subsidiary of a European Bank, for which he worked as a Risk Manager in 2007.

In today’s Sunday Business Post (Dec. 5th 2010, Markets M5), Kathleen Barrington reports that the authorities are coming under increasing pressure to account for their lack of action following the Whistleblower’s reports.

The Whistleblower resigned from his position in order to disassociate himself from breaches of rules that he had reported and which were potentially punishable by a fine or jail sentence.

Kathleen Barrington says that in spite of Senator David Norris and Joan Burton TD raising the alleged breaches in the Senate and Dáil and placing them on Parliamentary record, he feels that his questions have not been properly answered.  Joan Burton’s question to the Minister of Finance, Brian Lenihan, was asked 25th November 2010 after the Whistleblower says he had been pressing members of the Opposition parties to raise the issue in the Oireachtas for months.

Barrington reports “Minister for Finance Brian Lenihan responded that the Central Bank of Ireland was subject to strict confidentiality requirements and consequently did not share information with his department, “unless the issue gives rise, for example, to some broader financial stability issue” which did not arise in this instance.”

From my personal standpoint, I would say that Brian Lenihan’s ability to spot and deal with stability issues has not been outstanding. A liquidity breach of billions may very likely be an indicator of a serious underlying problems and surely in its own right has the potential to destabilise one or more institutions ?

Brian Lenihan added that the Central Bank had followed the breach up at the time and was satisfied that it was a “one-off” occurrence.

The Whistleblower is now questioning how Lenihan could consider a breach of 1,900% magnitude, in the sum of billions 0f euros, did not threaten wider financial stability.  He is asking if the European Regulator was informed. He also wants to know who carried out an external review of the bank in question, referred to by Lenihan, and what its findings were and is questioning why the Financial Regulator referred to current regulations as “new”, when they were not.

Is this the practice we are to expect in years to come?  One whereby the authorities simply re-issue laws as if they have never existed before, just because they failed to enforce them?  At least in Orwell’s 1984 all traces of the ‘old’ truth are shredded when a ‘new’ one is introduced.  In this case, the preamble to the ‘new’ Directive issued by the Regulator dates back to Central Bank Acts as far as 1942,  but neglects to mention that these were introduced in 2006 and enforced in 2007.   In view of the 2006 regulation, a good number of the executives and/or directors whose banks were guaranteed in that inconspicuous Sunday afternoon cabinet meeting in Sept ’08,  might either be facing prosecution, or have been indicted by now.  The IMF’s recent take-over of Irish state finances is the result of all this complicity and neglect.

At this stage, no one has been prosecuted in relation to the liquidity breaches and it appears no sanctions have been applied to the Bank. The Whistleblower, in contrast, is having to fight to get a hearing for his concerns, with scant attention from the Press, other than the redoubtable Barrington.

Which is more powerful in Ireland, we have to ask ourselves – democratically adopted law and regulation, or the Code of Omerta which punishes any insider who breaks ranks to tell the truth ?

Light touch regulation at the IFSC and elsewhere in Ireland has done terrible damage both here and to people and companies who invested here.  In 2007-2008, when the Whistleblower was doing his best to ensure good practice in regulation,  Taoiseach Brian Cowen was heading up an unusual working group –

“The Advisory Forum on Financial Legislation” was set up by Cowen when he was Minister for Finance and held seven meetings between the autumn of 2007 and November 2008. It was quietly disbanded during 2009 at a time when light-touch, or principles-based, regulation was being increasingly blamed for contributing to Ireland’s regulatory failures.…The forum was chaired by Pádraig Ó Ríordáin, the managing partner of Arthur Cox solicitors, and the membership of the forum, as well as its drafting subgroups, was dominated by the financial industry and the private sector.  A Finance position paper from March 2007 stated: “Lawyers from the important sectors of banking, insurance, funds and investment sectors would be closely involved in the steering group.

In a private address to the forum in January 2008,  Mr Cowen said he had established it with full Government approval to ensure full “involvement of the wider community of interests. The forum’s task was to prepare for “cross-sectoral principles-led regulation of the financial sector” within 12 months”.
The Irish Times – Monday, April 26, 2010

I have suggested over the last few months whether the German Government’s aggressive response to the terms of the EU- Ireland “bailout” loan agreement may stem from the serious financial hits incurred through the likes of DEPFA. Barrington agrees. She points to more than €100 billion losses occurred by German banking subsidiaries in Ireland. Ironically, in Ireland, one increasingly hears references to reckless German investors and bankers who, some economic commentators say, invested in risky Irish bonds at high interest and now want to be paid in full by the Irish people.

Given the interconnectedness and interdependence of the “national” parts of the international finance sector, it seems to me to be a red herring to see this as a national issue. Rather, it’s an conflict between the caste of people who have and hold wealth and are powerful enough to bend (or break) the rules and get away with it, and those struggling day to day to earn their livings, who are expected to carry the can.

The Whistleblower has shone a narrow and focused spotlight on one area of potentially lethal risk that existed in the banking sector in Ireland. We owe him a profound debt of gratitude for this. As the full extent of the carnage resulting from the International banking crash emerges, will others, finally step forward and open the sector up to the full glare of broad daylight ?

C. Flower 5.12.10