Wednesday, March 13 08:06:56
Minister for Finance Michael Noonan has directed Bank of Ireland, AIB and Permanent TSB to reduce their staff remuneration costs by 6 to 8 per cent to aid their return to profitability. The reductions are to be introduced by cuts in payroll and pension benefits, and new working arrangements and structures to deliver efficiency gains. The banks will be expected to begin delivering the cost reductions in 2014.
This direction comes on foot of a report on bankers pay for the Government by consultants Mercer. Mr Noonan said the remuneration cuts were "essential" for the banks to achieve a "return to profitability" and "repay the State's investment through a return to private ownership". He said "other options and measures" would be introduced by the Government to achieve the cost reductions in the event that the banks do not effect the savings that are being sought.
The report shows that salary levels at Irish banks are behind European averages for most grades. Since 2008, total remuneration at Bank of Ireland, AIB and PTSB fell by 6 to 11 per cent but rose by 1 per cent at Irish Bank Resolution Corporation, which largely reflects a premium paid to staff of that bank to compensate for the fact that it was in wind up mode prior to its liquidation by the Government on February 7th. The Irish Times
The euro zone crisis is not over, France is slipping on reforms and the Bundesbank has set aside billions in new provisions for what it sees as risky Europe an Central Bank moves, Germany's central bank said today. Presenting Bundesbank 2012 results that showed a sharp increase in its risk provisions, the German central bank's chief, Jens Weidmann, urged governments to tackle the roots of their troubles with reforms.
Mr Weidmann, a member of the ECB's Governing Council, opposed the bank's yet-to-be-used bond-buy plan agreed last September and believes euro zone governments must shape up their economies to exit the crisis rather than looking to the ECB for help. "The crisis is not over despite the recent calm on financial markets," Mr Weidmann told a news conference. There was uncertainty about the reform course in Italy and Cyprus, he said, adding: "The reform course in France seems to have floundered".
The ECB's other German policymaker, Joerg Asmussen, late last month urged France to take "concrete and measurable" steps to bring down its budget deficit. The Bundesbank is concerned about risks the ECB has taken on to help banks through the crisis, for example by accepting lower-rated assets in return for cash, exposing it to larger losses if a bank fails to repay. The Bundesbank said it increased its risk buffers by E6.7 billion to E14.4 billion. The Irish Times
The National Treasury Management Agency (NTMA) said last night that a new bond, due to be repaid in 2023, will be issued in the "near future".
The NTMA, headed up by chief executive John Corrigan, has been issuing bonds with gradually lengthening maturities since July last year when the first bonds since the bailout were placed with investors.
A 10-year bond is the latest step in the country's return to financing itself on the markets instead of through European Union and International Monetary Fund rescue loans. The Irish Independent
Defying expectations, a new report shows that the Irish non-profit sector raised almost 4pc more in 2011 than in the previous year. Its authors say that fundraising grew despite the lack of major developing world catastrophes in the year. In 2010 the Haiti earthquake resulted in healthy levels of fundraising but an increase was not expected for 2011.
However, the cost of fundraising is increasing. In 2011 charities spent 50.3 cents for every E1 they earned.
These findings were calculated by consultants to the non-profit 2into3 and charity insurer Ecclesiastical, based on 1,000 organisations. The Irish Independent