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Archive for December 12th, 2012

NorthernIrelandDenomAnalysis

Yesterday’s release of detailed Census figures for Northern Ireland makes for fascinating reading. You can find all the analyses here but one analysis which inevitably has attracted much attention is the religious split of the 1,810,863 people in Northern Ireland in March 2011. This is because of the historical association of Catholicism with Nationalism and Protestantism with Unionism. The figures for March 2011 show 817,385 Catholics and 875,717 Protestants and 117,761 “other”. Belfast and (London)Derry are now Catholic-majority cities, though overall, across the six counties of Northern Ireland, there is a Protestant majority of 58,332.

Between 2001 and 2011, the number of Catholics in Northern Ireland increased by 79,912 from 737,473 to 817,385. During the same period, the number of Protestants fell by 19,665 from 895,382 to 875,717. These changes took place over a decade. Taking the changes in the 10 years between 2001 and 2011, and dividing these in half would indicate that by the end of 2016, there will be 863,333 Catholics and 864,407 Protestants. A month or two later, Catholics would be in a majority, using this extremely crude extrapolation.

All of this assumes trends seen in the 2000s – more emigration and natural mortality with Protestants and more fertility and immigration with Catholics – continue, and although these trends may not continue, the experience of 92 years since Northern Ireland was created would indicate it was a safe bet that they will.

Of course it is raw and possibly very inaccurate to portray all Catholics as Nationalists and all Protestants as Unionists. In recent weeks, Unionist parties in particular have been keen to claim that some, maybe even a lot of, Catholics support the union between Northern Ireland and the rest of Britain, ahead of reunification. We have heard little from the other side, but commonsense would suggest that some, maybe even a lot of, Protestants might support reunification ahead of the union with Britain. Might instability and insecurity and an inevitable demographic trend actually accelerate reunification?

The figures are particularly interesting on here because of a hobby interest in the history of Ireland in the second two decades of the last century. What would the original stalwarts of Unionism, James Craig and Edward Carson make of a Northern Ireland today in which 45% were Catholics and 48% were Protestants? After all, the only reason that three of the nine counties in the province of Ulster were lopped off in 1920, was to create an artificial territory and subsequently, a country, where there was a significant majority of Protestants.

In 1911, there were 674,264 Catholics in the nine counties of Ulster and 837,509 and 69,923 “other” – Catholics 42.6% and Protestants 53.0% – and in 1920 when the Island was partitioned, this was deemed too significant a Catholic presence to guarantee Unionists a secure grasp on long-term power. And so a six-county Northern Ireland was carved out of Ulster, with those six counties having a population of 1,250,531 comprising 430,621 Catholics and 768,056 Protestants and 52,313 “other” – or 34.4% Catholics and 61.4% Protestants.

So what does this all mean for the future? Sinn Fein is already angling for a referendum on reunification, and the Good Friday Agreement upon which Northern Ireland’s position is today built, allows for reunification based on a majority in referendums on both sides of the Border, that is a majority in Northern Ireland and a majority in the Republic. The Good Friday Agreement binds both the British and Irish governments to implement that choice. It will be Autumn 2014 when Scotland will hold a referendum on independence from the rest of the United Kingdom. Yesterday’s Census results have probably accelerated the prospects here for a referendum on the Border.

[Sources: Most of the religious splits in former Censuses are derived from the University of Ulster/Conflict Archive on the Internet here http://cain.ulst.ac.uk/ni/religion.htm

The 1911 Census for Ulster is taken from the 1911 Census held at Ireland’s National Archives – http://www.census.nationalarchives.ie%5D

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IBRCLetter18Oct12

First of all, we had the second most powerful elected representative in the State saying he was powerless to adjust salaries and pensions in banks in which controlled 100% of the shares, and today we find out via RTE that the Minister for Finance, Michael Noonan, when asked if he had confidence in the board and management of IBRC – formerly Anglo and Irish Nationwide – has to contact the bank to find out if he does or doesn’t have confidence, and then doesn’t answer the question he was asked. Confused?

On 19th October 2012, the chairman of IBRC, Alan Dukes who is a veteran colleague of Michael Noonan in Fine Gael, writes to Michael saying he “understands” Minister Noonan has received a question regarding the secondment by Minister Noonan of an employee in his Department of Finance to a senior role at IBRC and that further, Alan Dukes “understands” the question requests Minister Noonan to confirm his “continued confidence in the Board and management of the Bank [IBRC]”

Going back a step before this, it seems that the Sinn Fein leader, Gerry Adams submitted a parliamentary question to Minister Noonan which read

“if he will confirm the reasons a person (details supplied) from his Department was appointed to an initial six month secondment in Irish Bank Resolution Corporation; if he will detail his exact role; if he will confirm the reason it was considered appropriate to second his Department official into IBRC now and not before; if he will confirm that he retains confidence in both the board and management of IBRC; and if he will make a statement on the matter”

It is not clear when Deputy Adams submitted the question but he received a response on 23rd October, 2012. But the sequence appears to have been:

(1) Deputy Adams submits question to Minister Noonan, asking for information and opinion that should have been entirely in the Minister’s own realm and the realm of the Department of Finance, to provide

(2) Somehow, the question was passed to IBRC, even though the information requested should have been entirely available in the realm of the Department of Finance which seconded Neil Ryan to IBRC.

(3) We then have the chairman of IBRC expressing “significant concern” that Minister Noonan has been asked to express confidence in IBRC

(4) We finally have the answer from Minister Noonan – shown below – which doesn’t express confidence in the bank, it merely says that seconding an employee from the Department of Finance doesn’t betoken a lack of confidence.

Seemingly, the “powerless” minister, when asked if he has confidence in something, needs consult with that something. And this is the key minister negotiating our bank debt with the ECB!

This is the entire parliamentary question and response. RTE was responsible for obtaining the letter shown above, but having considered the letter and the PQ, you might conclude the RTE reporting of the matter today isn’t entirely accurate.

Deputy Gerry Adams :  if he will confirm the reasons a person (details supplied) from his Department was appointed to an initial six month secondment in Irish Bank Resolution Corporation; if he will detail his exact role; if he will confirm the reason it was considered appropriate to second his Department official into IBRC now and not before; if he will confirm that he retains confidence in both the board and management of IBRC; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan:   The secondment arrangement for the person referred to in the question is appropriate at this time as IBRC continues to explore opportunities for deleveraging with a view to maximising the recovery for the taxpayer. The addition of this person to the bank’s senior management team, as Head of Market Solutions, brings a wealth of expertise and knowledge to IBRC and will further strengthen the organisation. This arrangement does not in any way infer any lack of confidence on my part in the Board and management of the bank in carrying out the mandate of the bank. The person referred to in the question’s experience in banking coupled with experience as Assistant Secretary in the Dept. of Finance will serve to assist the IBRC management team in identifying deleveraging opportunities and the formulation of strategy. As Head of Market Solutions at IBRC, this person is responsible for all aspects of deal execution in respect of certain designated portfolios. In addition as a member of the Bank’s Group Executive Committee (GEXCO) and the Transaction Review Committee, this person will participate fully in the formulation of strategy for IBRC as a whole.

UPDATE: 12th December, 2012. There was a follow-up question from Deputy Gerry Adams to Minister Noonan on 13th November, 2012, when the Minister does in fact express himself to be “fully confident in the management and the board of IBRC”

Deputy Gerry Adams: To ask the Minister for Finance further to Parliamentary Question No. 138 of 23 October 2012, if he will confirm irrespective of his statement that the secondment of a person (details supplied) into Irish Bank Resolution Corporation should not be adversely inferred as a lack of confidence by him in the management or board of the bank; if it is the case that he retains confidence in the management and the board of IBRC; and if he will make a statement on the matter.

Minister for Finance, Michael Noonan : I can confirm that the appointment of this person to IBRC does not in any way reflect a lack of confidence by me in the management or board of the bank. The appointment has proved to be very beneficial for both IBRC and my Department by improving communication between the organisations. I am fully confident in the management and the board of IBRC and I am satisfied that the new appointment is a positive step in the continuing goal of winding down IBRC and maximising the eventual return to the taxpayer.

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It had been a particular bugbear on here that there wasn’t a property price register available in Ireland, until the IMF frogmarched the Government into introducing a limited register in September 2012 which shows residential property transactions from 1st January 2010. Such delays in providing a basic level of transparency seem inexcusable and all government parties from the 1970s onwards have been guilty of paying lipservice to a register but never delivering it when in office. And the absence of such a register has meant the Government was severely constrained when it estimated the €250m of revenues in 2013 that would flow from its new property tax which was based on property value.

But surely, having engaged an expert group to produce an expert report, and as we found out last week, the expert group engaged the ESRI to produce a sub-report and having known for at least 12 months that it would be introducing a property tax in 2013, surely the Government has robust estimates of the value of property in Ireland.

Surely?

It seems that the Government estimate of property values is based on incomplete sources and the Government has committed to the new tax, but that it is more or less clueless what the tax will generate, kinda like buying a scratchcard.

In a response to a parliamentary question from the Sinn Fein finance spokesperson yesterday, the Minister for Finance Michael Noonan conceded “No database exists as yet containing the valuations of the housing stock in the State.” and that estimates were based on the transactions in the property price register and one “unpublished Central Statistics Office (CSO) data based on mortgage transactions and the CSO’s property price index” In other words, who knows, and as Minister Noonan says in his response “However, caution should be applied to this approach given the low number of transactions, the high percentage of non-mortgage transactions (i.e., cash transactions) and the possible bias in recent transactions towards transactions of higher quality housing stock which may not represent the generality of housing valuations in the State”

Here’s the full parliamentary question and response, it is shown as a graphic because the table doesn’t easily copy into text.

PropertyValuations

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On 3rd December 2012, Donal O’Donovan in the Irish Independent reported that IBRC – which was formerly Anglo and Irish Nationwide – asked one of its borrowers to withdraw a complaint against its auditors Ernst and Young. This request was apparently made in the context of the borrower negotiating the repayment of loans of €20m. The borrower in question was Johnny Moran, who has developed hotels and property in Dublin city centre. The Independent went on to report that Johnny had made the complaint in April 2012 to the accountants’ regulatory body, the Chartered Accountants Regulatory Body. The full complaint doesn’t appear to be available but the Independent reported it “included” a charge that there was a conflict of interest in Ernst and Young who had acted for IBRC and might not be impartial in their role as receiver to his businesses. The Independent didn’t report if Johnny had in fact withdrawn the complaint.

The matter was curious in itself but became even curiouser when IBRC decided to sue Ernst and Young in November 2012 – finance minister, Michael Noonan was asked to provide and outline of that case yesterday and you can read his response here. On one hand, you have IBRC suing Ernst and Young but on the other, you have IBRC trying to stop one of its borrowers pursuing a complaint against the same company.

What is going on?

Yesterday in the Dail, the Sinn Fein finance spokesperson Pearse Doherty asked the Minister Noonan about the matter, and why IBRC would act in such a manner either specifically in relation to Johnny Moran or, if that was too touchy a subject, why in general the bank would behave like that. And the response was…..duckegg (again!). Minister Noonan said the information contained in Donal’s report in the Independent was “privileged” and Minister Noonan wasn’t saying anything because the matter was sub-judice. However, he wouldn’t respond to the question as to why, generally, IBRC would behave in such a curious manner.

The full parliamentary question and response are here.

Deputy Pearse Doherty: To ask the Minister for Finance further to a newspaper report that the Irish Bank Resolution Corporation requested a borrower to withdraw a complaint by the borrower against a company (details supplied) the reason IBRC would specifically or in general adopt such an approach to one of its borrowers..

Minister for Finance, Michael Noonan :  I have been informed that it should be noted that the newspaper article in question published details of privileged information and the Bank has not waived the privilege attaching to that information. These matters are the subject of on-going litigation and it is not appropriate for the Minister to make any comment.

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