Inside the world of business
Wheels of justice turn slowly
THOSE ANXIOUS to see Seán FitzPatrick held to account for his stewardship of Anglo Irish Bank will be dismayed at the news from Chartered Accountants Ireland.
The decision to postpone a disciplinary tribunal scheduled for next month is as understandable as it is frustrating.
It follows a request from the Director of Public Prosecutions, who is concerned the tribunal might prejudice any criminal action brought against FitzPatrick.
The Financial Regulator has already indicated that he too will hold his fire until the Garda have finished their investigations and the DPP has decided whether or not to bring a prosecution.
Both the institute and the regulator are correct to stand back – given the wider range of sanctions and powers available to the State.
In any case, they don’t really have any choice in the matter.
But the question does arise as to how it is that a part-time committee chaired by the former Comptroller Auditor General John Purcell is ready to hold a public tribunal into FitzPatrick when all the massed resources of the State have yet to even arrive at a point where they want to charge FitzPatrick with anything
The Garda and the DPP are not only leaving themselves open to accusations of foot-dragging, they also run the risk of now looking like they are getting in the way of those who are trying to hold FitzPatrick to account.
EU picking the wrong fight on bailout details
EUROPE HAS a terrible tendency to fight the wrong war and the current row about the interest rate that Ireland will pay on the €45 billion that Europe has contributed to the €67.5 billion Irish bailout is a case in point.
The real issue is whether or not the programme agreed with the EU and the IMF in December is still fit for purpose. As things stand, its stated aims appear contradictory.
The rapid sale of €80 billion worth of Irish banks assets – and the associated losses – is incompatible with the notion of returning the State’s finances to a sustainable path and keeping the total size of the EU-IMF support to €67.5 billion.
It is becoming increasingly obvious that some other mechanism has to be found to slim down the banks. The consensus is that some sort of transfer of assets at par into a special-purpose vehicle (SPV) is the preferred route. This is the route taken by most of Europe’s other broken banks.
The problem Ireland faces is that the banks can’t fund the SPV and neither can the State. The only other sources of funding are the European Central Bank (ECB) and the European Financial Stability Fund (EFSF).
The ECB is trying to reduce – not increase – its exposure to Irish banks and the EFSF, as currently constituted, is not an option. The breaking of this logjam might be a more fruitful area for discussion than the interest rate of a rescue package that is rapidly looking like it what it is: something cobbled together in a few fraught days in December.
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