Monday, July 02 08:33:47
The Government is working to a deadline of the end of October for reaching agreement with the European Union on substantial reductions in the State's bank debts. Minister for Finance Michael Noonan will table the Government's first proposals for a revised banking debt arrangement for Ireland at a meeting of EU finance ministers in Brussels next Monday. However, Mr Noonan, Taoiseach Enda Kenny and Tanaiste Eamon Gilmore have all refused to quantify the scale of bank debt reduction they will seek when negotiations begin in earnest next week, although it is understood officials are working on a possible cut of upwards of half of the total E63 billion spent to date on bailing out the banks.
Mr Noonan said over the weekend he wanted a successful outcome on the bank debt issue before the budget in December. Last night, senior sources familiar with the process said, in practical terms, that meant a resolution by the end of October. The Government also needs to be in a position to have certainty by the end of October over the State's ability to fund itself over the following 12 months: this one-year-rule is one of the preconditions laid down by the International Monetary Fund for programme countries.
At the meeting on Monday, Mr Noonan will outline for the first time the Government's detailed interpretation of the outcome of last week's summit in Brussels, which agreed that bank debt should be separated from sovereign debt. The conclusions specifically mentioned the sustainability of Irish debt and the principle of equivalence in the EU's response to crises in different countries. Mr Gilmore and other senior figures emphasised the complexity of the negotiations, particularly in applying new rules retrospectively to bank debt already borne by the Irish sovereign. "You have to look at our record. All of the records we have conducted with the troika, the EU and other member states have been conducted in private. That's the most productive way of getting an outcome," he told The Irish Times. The Irish Times
The health insurance market in the Republic is set for its biggest shake-up in more than a decade after a fourth provider enters the market from later today. Glo Health is being set up by three former executives with Aviva, the third largest insurer in the Republic. Insurance company Irish Life is to take a 30 per cent stake in the new company. It plans to offer just five products aimed mainly at a younger market in the initial stages but will allow people to tailor-make their policies in a way that the three other providers in the market do not currently do. This pick-and-mix arrangement could see its pricing models come in substantially lower than some its more long-standing rivals.
Glo Health is being set up by Jim Dowdall, Stephen Loughman and Oliver Tattan, the chief executive and driving force behind Vivas Health Insurance which was subsequently taken over by Hibernian before becoming Aviva. It is understood the new company is to target the corporate market in a serious way and it has already secured the business of at least one blue chip company. Industry sources said the company is likely to come to market with three comparatively low-cost policies catering for the majority of the market and two appealing to those interested in high-end and more expensive plans.
"The company is going to offer health insurance in a completely different way and it will see people given more flexibility in terms of what they can and cannot have covered," one industry source told The Irish Times yesterday. "The three individuals behind the new company will also be coming to the market having learned a lot with Vivas and they will be able to use that experience to challenge for market share very quickly," the source continued. The Irish Times
Barclays Chairman Marcus Agius quit today, saying an interest rate rigging scandal had dealt "a devastating blow" to the bank's reputation and "the buck stops with me". Agius, chairman at Barclays for 5-1/2 years, will stay in his position until a succession plan is in place. The move may be seen as an attempt to take the heat off Chief Executive Bob Diamond, who along with Agius has faced calls to resign after the bank was last week fined $453 million by British and U.S. regulators for submitting inaccurate submissions on the Libor interest rate.
"Last week's events - evidencing as they do unacceptable standards of behaviour within the bank - have dealt a devastating blow to Barclays reputation ... the buck stops with me and I must acknowledge responsibility by standing aside," he said in a statement.
Barclays has admitted that some of its traders attempted to manipulate the setting of the London interbank offered rate (Libor), which is used worldwide as a benchmark for setting prices on about $350 trillion of derivatives and other financial products. The scandal threatens to draw in more banks and potentially regulators and authorities. The Irish Independent