Monday, March 30, 2009
Supporters of Irish Aid Make a Weak Case for No More Budget Cuts
The Irish Times recently published a letter from me in which I advocated that a portion of the Irish Aid budget should be reallocated to Irish charities such as The Society of St Vincent de Paul and The Simon Community to alleviate poverty and distress at home. We are now living in a society which might yield tax revenues of €34 billion in 2009 but whose dysfunctional health services alone cost €14 billion and whose level of unemployment has increased by over 200,000 and is continuing to escalate. The overall economic prognosis is extremely uncertain and volatile.
The OECD has a published report in advance of the G-20 Summit in London which indicate that donor nations are falling behind on aid pledges despite but increased development aid by 10.2% last year to enhance core programmes. Excluding the effect of debt relief measures, the value of overseas aid to about €88 million but this was just 0.3% of the GDP of donor countries, equivalent to 1993 aid donation levels. The report indicates that only 5 countries, Luxembourg, Denmark, Sweden, Norway and Holland exceed the 0.7% target that Concern and its counterparts refer to as the ‘solemn undertaking by the Government’ to the UN The commitment by the US, UK, Japan and Germany are miniscule in comparison, although the UK has made up substantial ground. There is now concern that the bid aid increased agreed when the G-20 met in 2005 may not be greatly moderated.
I stated in my letter that charity begins at home but I also agree it should not necessarily end there! I believe that our nation should make every effort to support Irish Aid, but within our capacity to do so.
Ireland has paid €5.3 billion in overseas aid over the past decade and the annual sums committed to it have risen steadily each year. Ireland has therefore delivered, but what has actually been accomplished?
I don’t have a comprehensive sense of how much charities with an indigenous mission raise but I did observe that the annual revenues of the Society of St Vincent de Paul in Ireland have been in the region of €45 million. I suspect that the overall amount of funds raised for Irish purposes are significantly less than the amount of Irish Aid committed elsewhere. All charities are finding it much more difficult to raise funds in the prevailing economic climate. There is no need for me to embroider the rationale that more resources are needed at home. Sadly, the evidence is abundant. What I am suggesting is that fresh compromises are necessary that take current and prospective realities into account, at home and overseas.
If I was petitioning the Taoiseach in defence of the Irish Aid budget and by obvious implication, I saw the necessity of persuading a large cohort of the Irish population that my case has real merit, I would approach the persuasion task in a different way.
I would try to ensure that the public consciousness was animated by the actual accomplishments with the funds committed and, specifically, how ongoing funding would make a direct difference. I would describe what adaptations have been made to programmes to ensure the greatest impact is made with the resources expended; which projects have been abandoned or curtailed and why; which projects have been brought to a successful conclusion; what is the rationale for multi-decade commitments in some instances; how has project funding evolved? I would address, as a point of information, the issue of insidious corruption in recipient countries and the impact of this on supported projects. I would also avoid fantasy statement about the eradication of the sources of poverty. However noble and well meaning these maybe the possibility of eradicating poverty is about as achievable as the eradication of rumours or the science of economics becoming redundant!
I recently received an e mail from a cousin recently in which he stated “I quit PricewaterhouseCoopers last November in order to work as a volunteer with GOAL. I've been working as an accountant for GOAL in North Sudan since November; so far it has been a great experience; very eye-opening”. That comment tells a story, narrates an anecdote and creates a sense of intrigue!
Is it really enough for the advocates of no further cuts to the Irish Aid budget to merely state that €5.3 billion over 10 years “make a real and positive difference”. One would expect that to be the case – as an absolute minimum baseline. But what are the ‘star achievements’, the enduring footprints - that are uniquely Irish? Those sterile, passive exhortations created by a committee do not!
Comments that are excessively passive in tone and ‘feel-good’ expression doesn’t convey very much and are too simplistic. Will they really animate the imagination and passion of your jury – the Irish public whose will the politicians must tilt towards? Clichéd references to ‘fairness and equity’ are two-a-penny these days but vary tremendously in practice with one’s perspective, experience and personal circumstances. Unfortunately, the circumstances of hundreds of thousands of Irish citizens have changed immeasurably for the worse and the prospects of alleviation are non-existent.
They routinely trot out the expression ‘solemn undertaking’ as if it was an immutable clause in the Constitution or a blast from the pulpit. But the religious connotation may not have the desired impact on many of a secular disposition would not identify with. Why would they it not construct a more persuasive argument that would resonate with a greater number of people?
There is such a visceral sense of betrayal in Ireland as a consequence of the malign behaviour of financial institutions, politicians, power brokers, influence peddlers and even bishops that citizens no longer believe that any pillars of society ‘keep their word’ or respect trust. This destruction of this principle has greatly impaired Ireland’s national reputation to the extent that the fatted cow that kept the entire economic system prospering, including Irish Aid, is in tatters. But the jailing of corrupt and incompetent greedy bankers with messianic egos’ would impact more on the national reputation that an adjustment in the amount of the Irish Aid budget - which would make little, or negligible, impact on its rehabilitation or restoration of the nation’s reputation.
The challenge for charities is how to successfully intercept the imagination of the nation to make the strongest possible case for their viewpoint and keep those pay the bills convinced that the money is thoughtfully, creatively and productively spent!
Friday, March 27, 2009
Chartered Accountants Regulatry Board Widen Probe - But Is There A Conflict of Interest?
Mr Purcell, the former Comptroller & Auditor General is universally respected as a thorough and impartial investigator. I don’t personally know the Chairman of CARB, Liam O’Reilly, but I would be astonished if anybody were to infer that he is other than a man of the utmost integrity and probity. The comments I am about to make concern the juxtaposition of his circumstances and not his character.
Dr O’Reilly was appointed the first chief executive of the Financial Regulator on 1 May 2003 having previously been and assistant director general at the Central Bank. He was appointed the first chairman of CARB when it was established in 2007. He was appointed a director of Irish Life & Permanent Plc on 3 September 2008 and was therefore a director when the issue under investigation took place; when the board IL & P met for 7 hours late on Thursday, 12 February, but failed to fire the chief executive and chairman – presumably relying on the oft-spoken defence of “I’m a fighter, not a quitter”, in the case of the latter.
How can CARB credibly conduct this investigation when its own chairman is a director of the company being investigated and the subject of the investigation is of such a grave order of magnitude that it is tantamount to national economic treason? How, for that matter, could any member of the board of CARB be concurrently a director of any business where a chartered accountant’s professional behaviour is the subject of a special investigation? The eyes of society and not just the profession, the shareholders, those whose pensions funds comprise shares in Irish Life & Permanent and its customers will be scrutinising the findings of Mr Purcell in refined granular detail - if they are published by CARB.
Ireland has wilted under the tyranny of crony capitalism. Germans’ refer to Ireland’s financial services industry a ‘the unregulated wild west frontier’. Who can blame them when it appears that the financial services industry is ungoverned and ungovernable and the Government almost appear to be crawling on their hands and knees in deference to the banks?
Concealed directors’ loans, involving hundreds of million of € over many years without the interception of the Regulator, or its CEO being properly informed by his own staff; the facilitation of tax evasion, of epidemic proportions, by thousands; DIRT evasion on an enormous scale; illicit overseas retail deposit accounts; widespread insidious random overcharging of bank customers and, in the case of AIB, less than €1 million of an estimated €75 million overcharged actually refunded 8 years later; bank development funding of such a magnitude that it imploded the Irish economy after the unsustainable inflation of property prices; a Regulator accused this week at an Oireachtas committee hearing of not acting promptly on the findings of a bank’s group internal auditor, internal auditors demobbed by bank chiefs who, in at least one instance, was subsequently cited by the Revenue Commissioners in March 2006 for six-figure personal tax evasion, obscene levels of remuneration, in some instances without the evident sanction of a properly constituted remuneration committee, personal pension fund aggrandizement by senior executives, 'know-nothing' boards of directors, a Central Bank whose 2007 warnings of economic doom are ignored, the absence of corporate governance standards in a building society, loan approvals personally fast tracked at a high level, without normal documentation, to facilitate compromised politicians, – to mention just a few.
These ‘unforced errors’ have resulted in derisory equity values, no dividends, collapsing personal wealth and the urgent need for the State to confiscate what’s left of personal wealth to compensate for billions of tax revenue, unavailable from previous sources.
To cap it all, citizens are affronted by a recently appointed bank chief executive, an insider crony-appointment, who not just lent excessively for potentially hideous commercial development but then personally advocated with the planning authorities, that the skyline of Ballsbridge should emulate that of Dubai, in order to inflate his grotesque bonus - even further. Perhaps this person is domiciled in a wigwam in Wicklow and, hence, perhaps his perspective of the sky is one that is not shared by 99.9% of the civic minded.
If CARB wishes to be recognised as a pillar of society it needs the profile, stability and independence of an ancient pantheon. If it fails to assert this it will become just another conspirator, in the well established tradition seen so frequently in Ireland that emulates the extravagant imperiousness adopted by the heads of minor African nations.
CARB has a solemn obligation to the 17,000 members of the Institute of Chartered Accountants in Ireland and especially to the young professionals who are being flung from, what was to be their promising careers, at KPMG, PricewaterhouseCoopers, Deloitte and other firms - as a direct consequence of crony capitalism and many have no prospect of imminent alternative employment outside the fast-food retail sector. Dr O’Reilly does should therefore be prevailed upon not to multi-task with the seamless facility of the late Jimmy O’Dea at the Gaiety Theatre Christmas pantomimes in the early 1960’s.
If society percevies that the 'game warden' is also a 'poacher', the efforts of Mr Purcell may well take on the enduring significance of an episode of The Jerry Springer Show or The Dukes of Hazard!
Wednesday, March 25, 2009
Overcharging at AIB - 'my personal experience'
Mr Eugene McErlean, former Group Internal Auditor of AIB Plc, from 1997 to 2002 presented to the Oireachtas Joint Committee on Economic Regulatory Affairs yesterday, March 24th. He told the Committee that the Financial Regulator knew about the overcharging of customers in AIB in 2001 and conducted an investigation in this in 2002 but failed to protect customers. He described how €65 million was liable to be paid as restitution to AIB customers who had been overcharged. He also related how a branch manager charged a customer for playing golf for 3 hours’ management time and how the overcharging regime never involved large individual sums so customers were never really in a position to argue. That is until they overcharged me!
When it comes to bank overcharging my antennae is particularly sharp when the subject is AIB Bank. My own experience predates the inauguration of the Irish Financial Regulator. I started a £14,000 20-year mortgage with AIB in 1978 that was fully discharged on schedule and with no missed payments. I recall one February day in 1999 looking at my AIB current account bank statement on the internet and being horrified to discover a debit for a £50 ‘Mortgage Closure Fee’. I instantly called the account officer at the Bankcentre branch in Ballsbridge where my account was maintained. I told this person outright that I was not paying this charge. She advised me that “everybody pays this charge” to which I again responded that “I am not”.
The branch manager then came on the line. I had never met him and I had the impression that he was busily scanning my account history on a computer before he began to converse with me. When he did so I said “you know why I’m on the line. I am not paying this charge”. He responded that I had “operated a very disciplined account” which was the case and still is, to which I replied “yes, so disciplined that the bank never has to spend as much as 32 pence on a stamp to recover a mortgage instalment over the previous 20 years, a period when interest rates were so high that the Government had to subsidise them. You have had this account for 25 years and you can have it for a further 25 seconds while you’re making up your mind about this charge”. He immediately took the only course open to him and dropped the charge.
This incident coincided with the attendance of former Taoiseach, Charles Haughey, at The Moriarty Tribunal and an examination of his relationship with AIB. He owed AIB over £1 million in 1979 when he was elected to the office of Taoiseach.. Haughey had received £750,000 from an unidentified source to help defray this debt and he apparently offered to arrange a £10 million deposit from a source in the Middle East in exchange for offsetting the balance of the debt. But Haughey never repaid a sum of £110,000, on which there was to have been no interest charged, as an element of an overall settlement. Mr Justice Moriarty found that AIB had settled a £500,000 overdraft owing by Haughey shortly after he became Taoiseach on favourable terms and that AIB had shown extraordinary deference to Charles Haughey in their dealings with him. Haughey, it appeared warranted special treatment because he was, as AIB would see it, a KBI (key business influencer). It also coincided with the announcement by AIB of record profits of £800 million+ for 1998.
My fingers were dancing with rage and I decided to write to the Chief Executive of AIB, Tom Mulcahy. The gist of what I said to him was that I was not a KBI but I would consider myself an LLP (loyal little peasant). I stated that this charge was immoral and that I would welcome a debate with him on one of the talk shows on RTE Radio 1; that if he had any balls he would have sent me a case of wine to thank me for my trouble-free business over 25 years rather than imposing this awful immoral charge. Three days later a 6-bottle case of wine arrived at my home from Mitchells Wine Shop, then located under the old railway arches in Harcourt Street!
The upshot is that:
- The charge was instantly removed from my account
- The charge, as then defined, was eliminated from AIB’s charge tariff
- The charge was one of those rogue charges similar to those described by Mr McErlean in his evidence on 24 March 2009, ten years later.
Tuesday, March 24, 2009
52 Senators Directly Elected in 26 Counties
Thirty two nations operate a single parliamentary chamber. Many are small countries with relatively homogenous populations. These include Denmark, Finland, Greece, Iceland, Israel, Luxembourg, New Zealand, Singapore and Sweden, to mention some.
Forty three countries opt for a duel parliamentary system, like Ireland, and several of these have federal structures. Examples include Australia, Austria, Belgium, Germany, Italy, Japan, Spain, Switzerland and the United Kingdom. An argument often cited in favour of a bicameral structure relates to the complexity of their demographic structure and a risk that elements of their society, or its former aristocracy if there was one, would be otherwise excluded from the governing system.
The first Seanad was convened on 11 December 1922 by Timothy Healy the Governor General. Members swore an oath prescribed by Article 17 of the Constitution of the Irish Free State. Its members included such luminaries as the banker Henry Seymour Guinness, Lord Glenavy, the former Lord Chancellor of Ireland from 1917 to 1921 and pioneer of the Courts of Justice Act 1924 which established the court service in newly independent Ireland, Sir Nugent Talbot Everard, the former High Sheriff of Meath, Galway born British Army General Sir Bryan Mahon, The 5th Marquis of Headfort, Andrew Jameson, a former Governor of Bank of Ireland, The Earl of Wicklow and Nobel Laureate William Butler Yeats. The oldest senator on inauguration day, Strabane-born Dr George Sigerson (1836-1925) was appointed chairman for the first day because he was the oldest member. The Sigerson Cup came into being in 1911 in his memory. When the Seanad met on the second day of its existence, 12 December 1922, two senators were proposed as candidates for chair, Sir Thomas Henry Grattan Esmonde, a former Irish Parliamentary Party MP and Lord Glenavy. Lord Glenavy was elected Cathaoirleach and Mr James Douglas as Leas Cathaoirleach. The final meeting of the first Seanad took place on 19 May 1936.
Seanad Éireann, as we know it today, consists of 60 members and came into existence on 27 April 1938. A knowledge of the Irish language, as well as a thorough grasp of parliamentary procedure, were deemed to be the vital qualities of a Cathaoirleach. Senator Seamus O hEochadha, also known as An Fear Mór, was elected. Candidates for senator are nominated by one of several vocational panels, the senate electoral costituencies comprising graduates of Trinity College Dublin or the National University of Ireland. Those chosen by the vocational panels are elected by the country's county councillors and Dail deputies. 49 of the 60 candidates are thus elected; the remaining 11 are nominated by An Taoiseach and these usually comprise political cronies either on the way in, or the way out, of parliamentary politics. Just a handful of distinguised individual have arrived in the Senate courtesy of a Taoiseach's nomination since 1938.
Today, there is a huge need for politicians with highly tuned political skills. Volatile Irish political opinion polls mirror an electorate greatly traumatised and threatened by unprecedented economic instability and horrified by the subversive leadership of the banks that aggravated the severity of this downturn in Ireland. Many decisions of unprecedented importance are pending. Each of the political parties in the Oireachtas has among its ranks some truly committed, able and talented members but there are also far too many in each of the parties whose capacity to inspire has become obsolete and uninspiring. If there is a dearth of real leadership how will this be filled, notwithstanding which combination is in power and forms a government.
The political system will only attract high calibre candidates if they have the chance of being able to make a real, sustainable, impact in a radically reformed legislature. The starting point for radical reform is Seanad Éireann with a different mandate, expanded powers and greater integration with both the lower House and the local authorities.
There have been 12 official reports addressing the issue of Seanad reform from 1928 to 2002 but we still have a grossly dysfunctional institution that has become an asylum for former TD’s and a crucible for prospective TD’s. The process of electing senators by county councillors and serving Deputies, based on a nomination from a vocational panel, is redundant. The university constituencies no longer represent the entire third and fourth tier of education in Ireland. These voting processes may have had some relevance when the nation was an adolescent, its institutions immature and when the worldwide capacity to instantly communicate was very costly, or non-existent.
Vocational issues in Ireland have found an effective voice through the partnership process of the past 22 years. The electorate has no empathy with senators because they did not elect them. It would be surprising if more than 1% of the electorate could name 10 of the 60 members of the Seanad. They are strangers to the population as a whole.
It is also an impertinence for political parties, Fianna Fáil, Fine Gael, Sinn Féin and The Labour Party to list their Senate members as a component of a Dáil electoral constituency, on the basis of their residence, unless and until they have been chosen to contest a prospective Dáil election. The Green Party does is not at fault in this repect.
The practice of An Taoiseach nominating 11 members is another perversion, especially in circumstances where An Taoiseach is not directly elected by all citizens.
A reformed Senate should be directly elected by all eligible citizens.
Its membership should be limited to 52 members, two from each of the 26 counties. It should have the capacity to initiate legislation and approve certain State appointment. The Oireachtas committee system could be the venue to eliminate inconsistencies in the legislative proposals of both Houses, should these arise. The Cathaoirleach of Seanad Éireann should have the same status and salary as the Dáil counterpart. Closer linkages could be fostered with local authorities if the senate candidate who secured the greatest number of votes in a county was also mandated by that election to become chairman of the largest local authority in that county for the lifetime of the Seanad. An exception could be made in the case of Dublin City Council which is to have a directly elected executive mayor by 2011. A wider talent pool, mandated by the electorate, would also be available from which to choose cabinet ministers and minster of state (whose overall numbers clearly need to be reduced from the present 20 and aligned to credible political functions).
The consequence of these initiatives should be a streamlined legislature that has an abundance of talent; a legislature which is more effective and more efficient and an electorate somewhat more reassured that the nation is on the road to recovery and not the road to perdition.
Friday, March 20, 2009
Republic of Ireland trippers cause tax loss when they shop in the North
- Operating costs
- Profit taking in the Republic
- Taxes - VAT is lower in Northern Ireland
- £ / € FX rate
Monday, March 16, 2009
Fingleton's Hubris and Brass Neck
Fingleton's €2.313 million annual remuneration in 2007 was more than 47 times greater than the average annual remuneration of each of his 400 staff. This increased to €2.38 million last year but there is no evidence that a remuneration committee is in place at the Society to sanction this.
Directors' emoluments between 2000 and 2007 amounted to €16.75 million but each annual report strongly and consistently advocates 'the importance of cost control and how it continues to be a major objective of the Society'. This was a period when its emphasis changed to commercial property and it was thought there were ambitions to demutualise.
There have been only 3 non-executive directors on his board (compared to 7 at EBS), each with long tenure - until the recent appointment of 2 non-executive directors, Rory O'Ferrell and Adrian Kearns, by the Irish Government, who are to act in the public interest. The non-executive directors received 8.4% of the directors' emoluments in 2007. Is this a measure of their proportionate influence? It would seem that their influence is as muted as that of the the impact of the Governor of the Central Bank in reigning in the Irish banks as the credit crisis worsened and they were knee-deep in property development.
The expression 'corporate governance' does not feature, even once, in the Society's 2007 annual report. There is not as much as a whispered comment on the website of the Corporate Governance Association of Ireland about the corporate governance standards at Irish Nationwide (or, indeed, Irish Life & Permanent Plc).
Some 60% of the assets and 70% of the revenue of Irish Nationwide is derived from the commercial sector in Britain and Ireland. It is hard to see how it can escape the carnage now visiting all financial institutions, particularly those embedded to the commercial sector, especially given the experience at EBS.
Mark Moran, chairman and Alan Merriman, financial director of the EBS resigned following the publication on 10th March of EBS annual results for 2008. This followed an impairment charge of €110 million on 20% of its loan book (€95 million arising from the provision of development finance and €15 million against funding provided to an Icelandic bank, now nationalised). This resulted in a loss before taxation of €38.2 million. No bonuses are payable to EBS management in respect of 2008; not so at Irish Nationwide! EBS, in assessing its loan portfolio, is concerned with €500 million in development financing. Irish Nationwide had over €9.75 billion in commercial mortgages in 2007.
Revelations about Fingleton's €1 million 'pre-contracted incentive bonus' is the lastest of many displays of hubris and brass neck and it is also another rusty nail in the reputation of Ireland's financial services industry.
Remuneration levels in this industry have risen so astronomically since the turn of this century that they bear no coherent relationship to the income and resources of most borrowers, savers, and personal investors, especially in the midst of such a severe economic downturn.
The decision of the Irish Government to nationalise Anglo Irish Bank in January and to provide very substantial resources to 6 others from the Republic’s National Pension Reserve Fund has intensified public scrutiny and outrage. The Irish Government’s Covered Institutions Remuneration Oversight Committee (CIROC) completed it report on February 27th and Mr. Brian Lenihan TD, Minister for Finance, published the report on March 13th. Pay ceiling ranging from €230,000, in the case of the chief executive of Postbank, to €690,000, in the case of the chief executives of Allied Irish Bank and Bank of Ireland were recommended in the report. The pay ceiling recommended in respect of the Republic’s two building societies is €360,000. But Lenihan has put an absolute cap of €500,000 on maximum bank chiefs’ pay.
Cheslea Building Society, in the south east of England, is comparable in scale, scope and longevity to Irish Nationwide - although its total assets are €2 billion greater. Established in 1874, it operates a network of 35 branches and had assets in 2007 of €17.95 billion, compared to assets of €16.04 billion at Irish Nationwide in 2007. It is the 5th largest building society in Great Britain. The pay of its chief executive, Richard Hornbrook, in 2007, was £424,000 (€576,640), a quarter of that paid to Fingleton, and just 12 times that of the average paid to each of his 1,018 staff.
The former chief executive of Bank of Ireland, Brian Goggin, was criticised harshly in many quarters for the remuneration of €2.972 million that he received in 2007. But Bank of Ireland's total assets in 2007 were €188,813,000,000,11 times greater than those of Irish Nationwide. Would this justify a salary of €33 million for the top job at Bank of Ireland?
It was revealed in a High Court case in November 2007 that Irish Nationwide made loans of over €10 million each to Michael Lynn and Thomas Byrne, two former Irish solicitors who were dismissed from the profession after they gave multiple undertakings to financial institutions in respect of individual properties.
Last September, the ratings agency, Moody's, downgraded INBS because of its exposure to commercial property and development, which accounts for 80% of its loans. Moody's took into account a rapid deterioration in land and property values, which it says was exacerbating the already high loan to value ratios on the commercial property and development loan book of the building society. It was also concerned about what is described as 'concentration risks to its largest 20 borrowers' of the Society.
The former chairman of Anglo Irish Bank, Seán FitzPatrick, by mid September, proposed a merger of Anglo Irish Bank and Irish Nationwide but this was rejected by the Minister for Finance who stated the INBS was ‘well funded’ when the Irish Government inaugurated the State guarantee scheme for bank deposits.
When the Irish Government guarantee scheme was inaugurated on September 29th, Michael Fingleton’s son, who is employed at the London branch of Irish Nationwide, sent an e mail to at least one leading global bank stating that as a result of the protection of the Government's new bank guarantee plan, Irish Nationwide “represented the safest place to deposit money in Europe . . ." This directly contravened the assurance of Brian Lenihan, Minister for Finance that there would be no anti-competitive practices as a consequence of the guarantee and he referred the e mail of Fingleton junior to the Irish Financial Regulator who fined the Society €50,000.
Ireland awakened on December 18th to the shock announcement that Seán FitzPatrick had resigned as Chairman of Anglo Irish Bank and as a director of several other companies. It was disclosed that personal borrowings by him of at least €228 million, over an 8-year period by him from Irish Nationwide Building Society had been used to conceal his personal borrowings from the auditors and shareholders of Anglo Irish Bank. His borrowings from the Society were repaid in lump sum payments shortly after the Anglo Irish fiscal year end. While the staff of the Irish Financial Regulator discovered these transactions as early as last January the former chief executive of the Regulator declared that he was not advised of them and he resigned this position last January.
The Chairman of Irish Nationwide, Dr Michael Walsh tendered his resignation on February 19th. He had been a board member since 1995 and chairman since 2002. He cited ‘unfolding events’ as a context for his resignation. He indicated that the Society cannot survive without significant Government support and further reorganisation. The Financial Regulator has concurred with this.
Lenihan has indicated that he intends to oblige Fingleton to repay his 2008 bonusand his view better prevail. How can a bonus be paid in repect of unknown results? The citizens are now vital stakeholers and must be afforded an opportunity to consider the 2008 results, the governance standards are appropriate at Irish Nationwide before the issue of bailout is decided.
The political system has sleepwalked around Michael Fingleton for far too long. Failure to prevail would be tantamount to the Irish Nationwide grossly disrespecting the sentiment of the Irish public on whose support and goodwill its future viability depends and who in turn face most threatening and uncertain circumstances. They must not to be treated as nincompoops and nitwits.
Saturday, March 14, 2009
What Would Warren Buffett Make of Anglo Irish Bank?
Warren E. Buffett is a greatly admired icon of the American business world. He was born in August 1930 in Omaha, Nebraska. He is ranked 2nd on The 2009 Billionaire List published by Forbes with a net worth of $37 billion, having been the richest billionaire in 2008, when his wealth amounted to $62 billion. He founded Berkshire Hathaway Inc in 1964. He has not increased his annual salary at Berkshire Hathaway beyond $100,000 (€78,000) in 28 years. Apart from salary, his overall compensation amounts to $491,000 (€384,000) but he will not be paid a bonus this year. He has also lived in his present home for over 50 years. He is still the Chairman of the Board and around 31,000 shareholders are expected to attend the company’s annual general meeting on Saturday, 2nd May in Omaha, an event that extends over a weekend and offers those attending the opportunity of an extensive discounted shopping spree at a wide range of Berkshire Hathaway consumer businesses!
Berkshire Hathaway investment interests are far reaching. They include the utility sector, insurance, manufacturing and retailing, finance and financial products and a wide range of investments in companies such as Coca Cola, American Express Company, Johnson and Johnson, Proctor & Gamble, sanofi-aventis, Swiss Re, Wal-Mart, The Washington Post and Tesco.
Buffet’s has very focused priorities:
- He ensures that they maintain substantial liquid resources, commits to modest short-term obligations and has diverse sources of earnings and cash
- He strives to ensure that each business has a robust basis (‘moats’) of competitive advantage
- He develops operating managers who deliver exceptional results
Despite his accomplishments, not everything he was invested in has been rewarding. The past year has seen his wealth drop by 40% as a consequence of the fall in value of the companies he has invested in. Most of the Berkshire businesses were adversely affected by the economic developments last year but between 1965 and 2008 they achieved a compound annual increase of 20.3%, or an overall gain of 362,319% since 1964.He invested $244 million on shares in two Irish banks in 2008 as they appeared cheap to him. But by the end of 2008 he had incurred an 89% loss on these, a development he describes as an ‘unforced error’ on his part.
Anglo Irish Bank was nationalised by the Irish Government on 21 January last on account of its systemic importance to the Irish financial system. Its former chairman and founder, Mr. Sean FitzPatrick, resigned on 18 December 2008 when it was disclosed that loans amounting to €87 million were not reflected in the accounts of Anglo Irish Bank and were hidden from stakeholder scrutiny at Irish Nationwide Building Society. While FitzPatrick maintains that this was a legal, if not transparent series of transactions, they would be unlike to pass muster with Buffett. Furthermore, the €1 million bonus and the 12% salary increase for 2008 paid to Michael Fingleton, the chief executive of Irish Nationwide Building Society is likely to be as much of an affront to Buffett as it is to Irish citizens.
The latest balance sheet of Anglo Irish Banks (at 30 Sep 2008), reflects €2,233,000,000 (€2.23 billion) invested in derivative financial instruments. Derivatives are financial contracts whose value is determined by an underlying value such as that of an asset, a commodity, a mortgage or even the movement of an index, such as an interest rate or the FX rate attaching to a particular currency. They are supposed to mitigate the risk of a change in the value of the underlying assets and that activity is hedging. The notional value of a derivative, based on the nominal value of the various assets underlying it, is not recorded on the balance sheet of the business owning it - but the market value is.
Buffett is scathing about structured derivative and describes them as ‘dangerous’ because they have dramatically increased the leverage and, therefore, the risks inherent in the financial system. It is almost impossible for investors to understand and analyze large businesses with substantial amounts of derivatives. He is likely to have similarly sceptical about securitized assets and leveraged funds.
An ordinary share can be bought or sold within days with one party obtaining cash and the other the corresponding security. There is no enduring counterparty risk which means that problems cannot fester. Rapid settlement is the vital to the integrity of the stock market.
But structured derivative contracts often go unsettled for years, or even decades and counterparties can build huge claims against each other. Paper assets and liabilities are hard to completely accurately assess; yet, in the case of Anglo Irish Banks, they are an important element of it financial profile.
A complex web of mutual dependence has developed amongst financial institutions with receivables and payables becoming concentrated among a small number of dealers who maybe excessively leveraged in other ways too. Buffett says that such participants “seeking to dodge trouble face the same problem as someone seeking to avoid venereal disease. It is not whom you sleep with, but also who they sleep with” that is the issue. The current financial crisis has demonstrated that only companies that can ‘infect’ a neighbourhood are attracting US government support and intervention.
Buffet believes that the chief executives of many large businesses were incapable of managing them because of the complexity of the derivatives those businesses are involved with. He doesn’t believe that any mechanism can provide sufficient transparency to describe or regulate derivatives or for auditors to audit them. He cites the collapse of Fannie Mae, Freddie Mac and Bear Sterns to support his opinion.
Buffett might also be curious to know if there is a connection between the Anglo Golden 10 that were provided with loans by Anglo Irish Bank to buy its shares outside normal market structures last year and those borrowers who owe the Bank more than €500 million. He might ask if this is the case were any covenants and obligations attaching to these loans broken at any time. If so what impact could this have had in persuading them to become involved in this Anglo loans for shares episode?
Friday, March 13, 2009
The Sinn Féin Candyfloss School of Economics Fails to Convince
The petticoat of the Sinn Féin Candyfloss School of Economics when raised slightly was less than inspiring in an opinion article by Mary Lou McDonald, vice-president, in The Irish Times on Friday, 13th March. She wants to form a new alliance and offer an 'egalitarian alternative’. A second No vote by Ireland in the Lisbon Treaty would of course expedite this goal. All of us would be equally poor, destitute. terminally unemployed and utterly bereft.
This egalitatian ambition is characterised by a potential orgy of additional public sector expenditure, platitudes about job retention and job creation. But there is not a single observation as to what type of productivity-enhancing, market focused, initiatives that are also cost-effective and economically viable, would sustain this dream. Does it ever dawn on these people that there really is no such thing as pure egalitarianism or absolute equality. These are relative terms and their achievement, to the extent that this is possible, does not exclusively depend on politicians, however indispensible they feel their contribution is and this usually involves a caricature of a nanny state, in one configuration or another. But the desirability of the State becoming 'the nipple of the nation' is as desirable as the caricature of ministers' of state having all the imperious bearing and grandeur of heads' of minor African states.
The scrapping of the public sector levy is proposed as well as ‘fundamental tax reform’. This might sound attractive to individuals like me who are subject to this levy. However, there is not as much as a single mention of how wealth based on real productivity might be created and rewarded. How can government expenditure be funded if there is no underlying wealth created to sustain it? Too much of Ireland’s wealth has been attributable to a false premise, specifically, the appreciation of property values at a breathless rate the consequences of which are now almost bankrupting the country. This was made possible by banks lending to people they should not have lent to and and borrowers who didn't have the means of repaying the capital borrowed and the associated interest. It has even been disclosed that the fund that provides welfare support will run out of resources by next year. This is funded by PRSI remittances.
Sinn Féin speak of ‘balanced public spending’ and ‘sensible borrowing’. What does this really mean? What borrowing ceiling is envisaged given prevailing economic circumstances and increased levels of State debt? Who will provide this money and at what cost? How credible a borrower would a government containing a Sinn Féin component have with potential lenders and those whose influence potential lenders heed?
Sinn Féin want to ensure that bank credit becomes available to sustain small and medium-sizd businesses. But in a world credit system that migrated from being dysfunctional to non-functioning and consumers have simply stopped spending, how is this to be accomplis
Job retention and job creation are mentioned. A job creation plan, detailed cost proposals and targets do not in themselves stimulate employment. They have as much potency as a bishop's apology for the deeds of a paedophile priest. Plans and targets merely offer incidental context that may, or may not, be relevant or useful. Furthermore, if the jobs’ ambition is merely on the 164,952 jobs that have been lost to date it could mean that the thousands of job losses that are sadly pending are not factored into the School of Candyfloss Economics policies. What will the the source of the anticipated jobs?
The suggestion that borrowing should be for strategic investment and be time-limited probably ought to be described in the first paragraph of Economics for Greenhorns. Who ever heard of a lender offering loans that are not ‘time limited’?
Why would Sinn Féin wish to ‘stop illegal evictions’? Illegal evictions are derring-do of neighbourhood mobs so perhaps they intend to resist their own racketeer or mobster elements.
Ending tax shelters, ending tax exile status, the overhaul of tax reliefs and the avoidance of tax evasion by the wealthy are awesome ideas but not exactly original or practical. Given that we live in a free society with guarantees of freedom of movement, how would Sinn Féin respond if all the categories they seek to impose greater tax burden on simply move out of this jurisdiction? The sandpit could empty very quickly and there would be nobody left to play with the train set.
I think that Sinn Féin have a great deal of political growing up to do in this Republic before they convincingly persuade those outside their core supporters that they offer a credibile, competent dynamic alternative governing option. They also need to escape the chains of their rhetoric and realise that empty shibboleths do not convince those who seek genuine and potentially sustainable change. The votes of floating voters are hard earned. All political parties need to convince a sceptical and distressed electorate that their ideas to restore competitiveness in Ireland are credibile and that productive wealth can be generated and rewarded. When that has been done it would then be time to cost and prioritise the initiatives that will lead to the type of society that each of them dream about.!
Thursday, March 12, 2009
Everybody Is Not Happy With Bank of Ireland Group CEO appointment!
Bank of Ireland ordinary shares currently trade at €0.24 reflecting a market capitalisation of €239 million. Two years ago they traded at €17 underpinning a market capitalisation of €17.38 billion.
Brian Lenihan TD, Minister for Finance, announced on behalf of the Irish Government on 11th February its intention to provide €3.5 billion in Tier 1 core capital to Bank of Ireland just two weeks prior to the announcement of the Boucher appointment. As this money is coming from the National Pension Reserve Fund there is naturally a heightened awareness and real concern among the Irish public about the capacity and competency of those in charge of the country’s banks’ against a background of very questionbable, if not illegal, shenanigans by Irish Life & Permanent Plc and Anglo Irish Bank and declared ignorance by the boards of these banks about these matters. The Bank of Ireland promptly announced, directly after the Government decision, that it would report a loss for the second half of this fiscal year and increased its three-year expectation for loan impairment charges to around €4.5 billion from €3.8 billion
When Governor, Richard Burrows, announced the appointment of Boucher on 25th February, he described his banking experience as ‘broad range’ and his ‘outstanding leadership’ as the credentials that inspired confidence. One might have anticipated, at this time of great uncertainty and threatening widespread hardship in Ireland, such a bland endorsement from a doddering actor in an episode of Yes Minister, but not from the governor of an institution that is so central to the welfare of so many and which is about to consume very substantial dollops of State support.
The prospect of new thinking, new credentials, new outcomes and enhanced credibility was ignored, leaving shareholders, customers and the public sniffing for clues, like canaries in a coal mine. Mr Dermot Desmond, whose current shareholding is worth in the region of €1.85 million down almost €6 million on his original Bank of Ireland investment, expressed ‘dismay’ at the Boucher appointment on the grounds that Boucher’s involvement and exposure to excessive property lending, some of which were based on overstated land values and inadequate, or rapidly diminishing, collateral.
Two days following your announcement, on Friday 27th February, the €7 million robbery took place at College Green branch perpetrated by an employee, under duress, without, apparently, the interception of any human being or electronic surveillance device. This was the largest ever robbery of a bank branch in Ireland. Despite being under duress it is baffling to comprehend why the person who perpetrated the robbery chose to take €7 million, a very bulky consignment to put into an average car. Why not more, why not less cash given that there was apparently €300 million on the premises as it is a district cash distribution centre for branches in the Dublin vicinity? It has also been subsequently disclosed in the media that Bank of Ireland may not recover any insurance money arising from this because standard procedures were not followed. Coincidentally a cashier employed at the College Green branch was convicted of using an illegal magnetic skimmer that resulted in 87 branch customer having €320,000 stolen from their accounts. This took place between October 2006 and February 2007. The accomplice in this instance was an Eastern European.
What does this tell taxpayers about the leadership credentials of the new chief executive, his capacity to choose dependable, trusted support staff that ensure vital procedures work effectively in practice? Should they consider this incident an apt validation of his coronation and of the judgement of those who selected him?
Mr Boucher has also been directly involved in generating exuberance and practices in the financial services industry that is now compromising the economic stability of this country and its international reputation. The proposed Dunne development at Ballsbridge, for example, was partly funded by Bank of Ireland. The scale of funding provided was enormous and enabled a site to be sold for a price in excess of €50 million per acre. It is yet another example of a bank ignoring the warnings from the Central Bank and Financial Services Authority since August 2007. If the funding was not so abundant the price would have had to be lower and the purchasers' of the development might have obtained better value had the development been approved and proceeded. But when there is a culture of 'more', 'more' and 'more', these are not considerations that matter.
The only basis for the viability of this ‘investment’ lay in the prospect of enormous property appreciation and the risk of converting Ballsbridge into a Calcutta-like slum. Mr. Boucher also personally advocated with the planning authorities on behalf of this development thus demonstrating an indifference as to whether the skyline of Dublin emulated that of Dubai and not a great deal of personal civic spirit or social intelligence. He was a fervent slave to what urgently need to become 'the old ways'.
The spiralling increase of the bad-debt provision at Bank of Ireland also indicates a rampant record of funding borrowers who should not have borrowed and whose incomes were clearly quite insufficient to repay capital and interest, whatever the course of property and general economic trends. The Bank of Ireland, in common with other Irish banks, is at the first stage of this chain and, tragically, mafia-like figures and other gangsters are at the other end acting as ‘debt collectors’. Are these factors that warrant widespread support, acclaim and public confidence?
How will Mr. Boucher rehabilitate confidence in Bank of Ireland shares and the expectations of those dependent on dividends? Some traders in large London firms, astounded by the venality and incompetence that was generally tolerated in Ireland, have closed all positions on Irish shares because these cannot be analysed on their computer models due to the opacity of the underlying balance sheets.
This is certainly one opportunity missed to define a new future and a more promising for Bank of Ireland and another example of the narrow golden circle described in True Economics by Constantin Gurdgiev?
Banking Salaries in Ireland and Elsewhere
When the Governor of the Central Bank, John Hurley, appeared before the Oireachtas Committee on Economic Regulatory Affairs on Tuesday, 10th March, he explained that the public exhortations of the Central Bank that highlighted risks to financial stability in Ireland from August 2007 were “not as effective as they might have been and they did not lead to a sufficient or timely change in behaviour”.
The Central Bank of Ireland's share of the paid up capital of the European Central Bank since January 2009 is 1.1107%. As a member of the European system of central banks it has no direct influence over interest rate determination but maintains responsibility for monetary policy functions and economic analysis - but there seems to be little attention to the latter, judging by the behaviour of the Irish banks and Mr. Hurley's comments.
The Committee were reminded that the Governor is paid an annual salary of €348,000, a figure that reflects the voluntary reduction taken by the Governor last October from the €368,000 that he had hitherto been paid.
It is interesting to compare the salary for this position with those whose influence on global economic affairs is absolutely pivotal and whose utterances and nuances hugely impact the world investment climate and the effectiveness of economic recovery initiatives.
The U.S. Federal Reserve System consists of 12 federal reserve banks located in major cities throughout the United States supported by the Federal Reserve Board based in Washington DC. The System as a whole employs almost 20,000 persons and the Board employs 2,053 persons. The annual salary of the Chairman of the Federal Reserve Board, Mr. Ber Bernanke, is $191,300 (€150,000), and was approved by the US Congress in February 2008.
The President of the European Central Bank, M Jean-Claude Trichet, oversees a staff of 1,499 persons and was paid €351,816 last year. He is also provided with a residence, in lieu of a residential allowance, but his salary is subject to EU tax, pension, medical and accident insurance deductions.
The Oireachtas Committee observed that the Canadian banking system “had operated quite well with prudential supervision of a high standard”. The Bank of Canada Governor, Mr David Dodge, whose 7-year term concluded on 31st January, was paid a salary scale the maximum point of which was CAN$407.900 (€250,000).
The Central Bank was founded in 1943 and Mr. Hurley is the 9th governor. He and seven of his predecessors formerly held the position of Secretary General of the Department of Finance. The exception was Mr. Maurice Moynihan, co-drafter of the 1937 Constitution and formerly Secretary of the Department of the Taoiseach.
The salary of the governor is therefore influenced by the salary of the Secretary General of the Department of Finance. This was set at €303,000 on 14th September 2007 by the Review Body on Higher Remuneration in the Public Sector, in its 7th general review, a figure that may have been reduced voluntarily by the current incumbent.
Tuesday, March 10, 2009
Charity Begins at Home!
The Survey on Income and Living Conditions (SILC) 2007 published by the Central Statistics Office indicated that the risk of poverty in Ireland at that time was 16.5% and that 5.1% of the Irish population endured consistent poverty. There is now a compelling need for urgent new thinking, fresh priorities and new practical initiatives, beginning with a separate approach to aid and welfare by the Government.
The Irish Government, through Irish Aid, has spent more than €5.3 billion on overseas development assistance making the nation one of the most generous donor countries in the world. Ireland committed to spend 0.7% of GDP on official overseas development assistance by 2012 at the UN Millennium Summit in 2000. That ambition is laudable and realistic when the resources to achieve it are ample but this is not the case in the foreseeable future and the Government needs to pardon itself from fully meeting this objective within that timescale. Charity begins at home and a portion of these resources are now badly needed to provide aid at home.
This arises in the context of the number unemployed in Ireland escalating from 165,000 to 365,000 requiring a further €200 million in welfare support and with singificant further increases anticipated. There has been a 19% drop in tax revenues in January and a 20% drop in retail sales in 2008.
A significant amount of FÁS resources are distributed to community related initiatives at least some of which, like meals-on-wheels in provincial areas, have essentially a charitable purpose and need to be realigned and accounted for as such.
The Government could begin by diverting at least €100 million to augment the diminishing resources of credible long-established voluntary charities, such as The Society of St Vincent de Paul, The Simon Community and others that directly alleviate dire need and galvanise their voluntary efforts. Their reputation is impeccable and their integrity above challenge. Their overheads are modest. Their modus operandi is focused, practical, widely understood and readily acclaimed. Their reach is extensive and their impact is mighty.
The Department of Community Rural & Gaelteacht Affairs could be augmented to act as overseer of such an initiative and create inspired guidelines and policies. The distributions of funds to the charities could be controlled by an independent commissioner operating to specific guidelines and accountable to the Public Accounts Committee.
There is a well developed and experienced set of voluntary agencies in this country that operate overseas and which demonstrate great flair in fund raising and promoting their work. The Irish people are deeply compassionate and demonstrate enormous generosity in their support of these, particularly at Christmas, Lent and in response to catastrophes’, strife and famine. There is no reason to believe that this spirit will abate and Ireland should continue to be a prominent donor to the relief of distress throughout the world while the Government is not ignoring the consequences of imminent poverty at home.
Sunday, March 8, 2009
Liam O'Reilly the first Irish Financial Regulator is a busy man
He has been a board member of Irish Life & Permanent Plc (IL & P) since early September 2008. His appointment was inspired by his "long experience in financial services, public administration and economic and monetary policy in Ireland and at EU level", according to Chairman Gillian Bowler in welcoming O'Reilly.
However, O'Reilly arrived at IL & P just in time for the transaction described as the €7.9 billion in 'exceptional support' to Anglo Irish Bank was executed. The source of these funds is being investigated by the Irish authorities including the Financial Regulator, the Director of Corporate Enforcement and the Garda Fraud Squad.
Bowler, admitted on March 4th this transaction was wrong; that her board knew nothing about it, that if they had, they would not have approved it. But they have not fallen on their swords, despite great unease among the staff and society-at-large - yet.
Mr O'Reilly became the first Chairman of the Chartered Accountants Regulatory Board (CARB) in April 2007. This Board supervises the "to regulate its members, in accordance with the provisions of the Institute's bye-laws, independently, openly and in the public interest".
This CARB appointed the former Irish Comptroller & Auditor General, John Purcell, on 19 February to undertake an investigation into the issue of dirctors loans at Anglo Irish Bank.
Loans to the former Chairman of Anglo Irish Bank, Sean FitzPatrick, for an 8-year period resulted in FitzPatrick's resignation from this position on December 19th as well as his resignation from the boards of Aer Lingus and Smurfit Kappa. The loans outstanding amounted to €83 million in 2008 and €122 million in 2007. These are the very loans which the staff of the Financial Regulator discovered when conducting sn examination of the books of Irish Nationwide Building Society in early 2008 but neglected to tell their boss, the last Financial Regulator, Pat Neary, in sufficient time for him to protect his position. Neary resigned from as Financial Regulator on January 9th.
If that was not enough to keep a man busy Liam O'Reilly is also a director of Merrill Lynch International Bank based at the IFSC. It was disclosed on 6th March that the Financial Regulator is investigating a possible rogue trader case involving an employee at the London branch office of this bank since February 18 relating to the 'mis-pricing of trades'. The NY Times reported that a FX trader may have lost more than $120 million and tha several hundred million dollars could have been lost on derivative trading - MLIB earned pre-tax profits of $860 million on reveues of $2.6 billion in 2007 before the financial tide turned for its parent.
Bank of America acquired Merrill Lynch on 15 September 15th 2008 for a €50 billion all-stock transaction that was "intended to create an entity that would become the leading financial institution in the world based on a great global franchise"
However, just a mere 4 months later, on 21st January 2009, the former boss of Merrill Lynch, John Thain, resigned following a fourth quarter loss in 2008 of $15.3 billion, - $553 million more than Bank of America expected it to lose when it acquired Merill.
Thain was a man with extravagant tastes and spent $87,000 and $68,000 on a sideboard when refurbishing his office last year at an overall cost of $1.2 million. Thain had suggested to his fellow directors the previous month that he be paid a $10 million bonus for the period since he became CEO of Merill in December 2007. He had already received a $15 million bonus in cash when he joined Merrill and a salary package anticipated to yield from $50 million to $120 million over several years.
The US Government has provided $45 billion in bailout money to Bank of America. Apart from selling 3 corporate jets, it is also selling a Merrill Lynch helicopter and has confirmed that no bonuses will be paid to Bank of America executives last year and the remuneration of its chief executive has been slashed by 60% to $10 million.
Saturday, March 7, 2009
The Mutual Loathing Rogue Politicans and Rogue Bankers
This past month have been characterised by politicians calling for the heads of 'rogue bankers' whose behaviour has been described as "treacherous" and which has "shamed the country" and "undermined the economy". There is no doubt that the indigenous self-inflicted wounds caused by Anglo Irish Bank and Irish Life & Permanent to the country's reputation have become water cooler topics across the world and they have badly bruised the stature and credibility of the country.
These same politicians have not been so quick to call the the heads of their colleagues whose conniving and skullduggery ought to have seen several of them jailed for long periods over the past decade and a half; yet some of these geniuses still grace Leinster House. Is the kettle calling the pot black? Ireland's capacity to successfully prosecute white collar crime doesn't seem to have moved beyond the jailing of televison licence defaulters but multi-million € tribunals have been the the most adverse legal venue to a judge that a politician has experienced
Despite the ethnic and social diversification of Ireland since the mid 1990's the cohort that populate the board rooms are drawn from an extremely narrow subset of the population - a cosy cartel of the well connected who happen to be well healed, with many being alumni of the same schools, if not products of the same neighbourhood. They typically particpate in the boards of each others companies and manage to either subvert or ignore many of the initiatives that would foster greater accountability. An expanding economy has enabled much of their malfeasance to be concealed or at least opaque but current circumstances have rather brutally exposed their derring-do.
If a rising tide lifts all boats the ebbing tide does the opposite and has exposed all the chicanery that might otherwise have been hidden. We listen to regrets, deep regrets and unvreserved apologies. For what? Hardly for the venal act but purely because they have been exposed with no place to run or hide. Unfortunately too many of them fail to deduce the obvious and vacate the panelled board rooms. But no doubt they will be obliged too before too long.
Bishop Magee Steps Aside
The support last January for Bishop Magee to remain in Cloyne by Cardinal Brady, with the prompting of Archbishop Clifford, (his successor) and Neary were glaring examples of misplaced loyalty that ignored the sentiment of victims and the public generally. It also seemed to the emergence of diverse approaches throughout Ireland to this issue with little cohesion evident.
The announcement of his stepping aside is a critical stage for the Church being able to move past this tragic debacle and to demonstrate some realistic conviction in its response. It is a pity that it took so long and the time that has elapsed must have been as stressful for the bishop as it would have been for others directly concerned. But it is an outcome to be welcomed.