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Roundup-Now to the bank recapitalisation

Tuesday, February 12 08:22:43

Private capital could be used to contribute to bank recapitalisation alongside capital injections from the euro zone's rescue fund under a proposal discussed by euro zone finance ministers.

The design of the European Stability Mechanism (ESM) direct recapitalisation instrument, including the possibility of attracting private capital, was discussed at yesterday's meeting of finance ministers.

Euro group chairman Jeroen Dijsselbloem said discussion of legacy assets and retrospective recapitalisation would be considered in subsequent months.

He added that finance ministers would discuss how best to support Ireland and Portugal in successfully exiting their programmes and fully returning to market finance at next month's meeting. His comments came as ratings agency Standard and Poors upgraded Ireland's outlook yesterday from negative to stable on the back of last week's promissory note deal.

Euro zone finance ministers are expected to deliver their verdict next month on those countries' request for an extension of certain loan maturities. The Irish Times

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Manufacturing firms may at last have a reason to celebrate if the latest economic figures - which suggest the manufacturing sector saw both a rise in the number of new orders and people employed last month - are to be believed.

Day-to-day life may continue to be tough for the majority of businesses, according to the latest research from Ulster Bank Northern Ireland, but some manufacturing companies appear to have found an export route out of the tunnel.

Richard Ramsey, the bank's chief economist in the North, says the latest survey of businesses in Northern Ireland shows employment has risen in local manufacturing firms for the last three months in a row.

Last month, there was also a welcome rise in new manufacturing orders - the fastest rate of growth in 13 months.

Although keen to point out the positives, he notes also that manufacturing output and employment are nowhere near where it was before the economic downturn.

One man who definitely wants a slice of the North's manufacturing success in the not too distant future is Conor Monaghan.

He may only have been managing director of one of the North's newest manufacturing firms for less than four weeks, but Monaghan is already making big plans.

Ambition

He wants Coalisland-based Blackrock Manufacturing, launched just last month, to rival the success of some of its closest neighbours in Tyrone.

The scale of that ambition becomes clear when you realise that Blackrock is a stone's throw from some of the North's most successful manufacturing companies.

Nearby is Powerscreen, the US-owned earth- moving and screening equipment giant, while McCloskey International, another leading crushing and recycling equipment manufacturer, is also close by. The Irish Times

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The Ulster Bank Construction Purchasing Managers' Index found that activity, new orders and employment all contracted during the month but business sentiment improved.

The overall index came in at 45.8 in January. That was better than the 43 seen in December but still points to a sharp fall.

Anything below 50 signals the sector is shrinking.

Optimism at Irish construction firms reached the highest levels seen since last June.

Managers at construction companies attributed the improvement in positive sentiment to improving economic conditions.

"While it remains the case that activity levels continue to decline, the pace of decline eased to its slowest since May 2012," said Ulster Bank economist Simon Barry.

The housing and commercial construction sectors were the best performers, while civil engineering was the worst as the Government continues to rein in spending. The Irish Independent

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Credit Review Office boss John Trethowan said banks are making loans to farms and low- and medium-risk companies but are not showing much appetite for lending to "more challenging but still viable businesses".

Mr Trethowan, who is responsible for looking at loans which have been refused by the banks, said lending to challenged businesses will be essential to support the recovery in the domestic economy.

While criticising the banks, however, he welcomed a new course for bank officials on lending to small companies provided by the Institute of Bankers in Ireland.

Mr Trethowan said that businesses and professional groups find banks to be "remote and somewhat binary" in their approach - they tend to only offer positive or negative responses to the companies' credit requests rather than trying to find workable lending solutions. The Irish Independent