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Ireland expects at least 100,000 job losses by end of March

Written by Business World, on 19th Mar 2020. Posted in Economy

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Ireland's five retail banks agreed to implement a loan repayment break of up to three months for those affected by the spread of coronavirus as the central bank on Wednesday cut the amount of capital lenders must set aside as extra protection.

Ireland expects its number of coronavirus cases to rise to 15,000 from 292 within two weeks. It has shut universities, schools, creches and pubs to slow the spread - restrictions the Taoiseach estimates will cost at least 100,000 jobs by the end of March.

The banks will defer court proceedings for three months, are ready to provide working capital and are committed that payment breaks for businesses and personal customers will not adversely affect customers' credit records, the lenders' representative body said after a meeting with the finance minister.

Minister Paschal Donohoe said that landlords whose tenants are struggling will also be offered the three-month break. Donohoe said this should allow landlords to exercise forbearance and that, while the state cannot legally stop them, no landlord should evict anyone.

Donohoe also said that banks can defer stamp duty due on credit cards to July and he raised the limit on contactless payments to 50 euros on health grounds to discourage cash transactions.

The lenders - Bank of Ireland, Allied Irish Banks , permanent tsb, KBC Bank Ireland and RBS's Ulster Bank, are ready to respond promptly to any further changing needs for customers, Banking and Payments Federation Ireland said.

The Irish entral bank cut the amount of capital banks must set aside as extra protection against risks from future crises to zero to support the economy, households and businesses through the coronavirus pandemic, it said.

The so-called counter cyclical capital buffer (CCyB) will be cut to 0% from 1% no later than April 2 and the regulator plans no subsequent increase before the first quarter of 2021 at the earliest.

Donohoe said the impact of the cut will free up more than 1 billion euros ($1.1 billion) of capital and that he had also decided to defer introduction of the systemic risk buffer, an added capital requirement under consideration by the central bank before the outbreak.

A central bank statement said that Ireland's financial system has built up capital and liquidity buffers since the banking crisis a decade ago precisely for periods such as this.

Donohoe said he was absolutely confident he would be able put forward "a very attractive plan" to financial markets for how Ireland will fund the coronavirus-related measures, noting the reserves the state has built up in its "rainy day fund" and constant pre-funding by the country's debt office. (Reuters)

Source: www.businessworld.ie

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