trueeconomics.blogspot.com/2010/ … ement.html
As a member of the Euro zone, Ireland retained full control over one of the tools of monetary policy, known as ‘reserve requirement ratio’ - or capital requirement ratio. Irish regulators (CBFSAI) has a full right to increase requirement on the banks operating in Ireland to hold the proportion of their deposits and/or proportion of their loans in reserves as capital to cover any expected losses.
Such an increase in the ratio would have reduced amount of credit available in the system and would have offset the dramatic increase in lending spurred on by the introduction of higher risk products such as 100% mortgages.
At a dinner event in 2006 I told, at the time, Governor of the Central Bank of Ireland that this is exactly what he needed to do to cool down the market for mortgages lending in the Republic. His reply was
Tools indeed…
another case of a bad workman blaming his tool?
The position of the central bank was the crowing achievement of status within the civil service, it was the sole preserve of the department of finance who got first refusal on the position. The head of the central bank would have coasted to retirement, then got to sit on the boards of the institutions they regulated.
His predecessor was not any better
The Governor of the Central Bank has defended the bank’s role as regulator of the financial institutions. At the Public Accounts Committee Inquiry into allegations of DIRT evasion, Maurice O’Connell said that the integrity of the banking system was not called into question by the DIRT controversy . Mr. O’Connell repeated that the Central Bank was aware of the concerns of DIRT evasion through bogus non-resident accounts. However, he stressed that this was a tax matter, over which the Central Bank had no control and no powers of inspection.Paddy Mullarkey , answered questions on the relationship between his department and the revenue commissioners on the administration of DIRT liability. Mr. Mullarkey told the committee that he did not seek advice on concerns regarding bogus non-resident accounts. He said that the issue was not a live issue until the present. The committee also raised questions on changes made to the declarations required of non-resident account holders between 1986 and 1997. Mr. Mullarkey accepted that the changes to the requirements made them less onerous, but he said that there was a fear of putting pressure on genuine non-resident account holders at that time.
Committee chairman Jim Mitchell asked the Mr. Mullarkey to furnish the inquiry with any documents referring to the problem of bogus non resident accounts during the from 1986 to 1998. Deputy Mitchell said that he found it puzzling and perturbing to discover what he described as “the silence of the files of former secretaries of the Department of Finance ”.
more
Speculation about Mr O’Connell’s successor had been growing in recent months. Among the names being mentioned were TCD Economics Professor Dermot McAleese, Department of Finance officials Noel O’Gorman and Tom Considine, or even Dr Michael Somers, chief executive of the National Treasury Management Agency. Traditionally the post has been given to the Secretary of the Department of Finance. Mr O’Connell who was Second Secretary was the exception.
Banking sources say that the Government’s request to Mr O’Connell to stay on is based on his unique knowledge of the euro and Ireland’s entry to the single currency. Department of Finance officials are believed to be anxious that the present governor should oversee the introduction of euro notes and coins in January 2002.
**Mr O’Connell, a career civil servant in the Department of Finance, was one of the principal defenders of the Irish pound during the devaluation crisis in 1992/93 when current Taoiseach Bertie Ahern was Minister for Finance. **
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Former Irish Depfa directors may be sued by parent group → irishtimes.com/newspaper/fin … 27333.html
GERMAN LAWYERS investigating the near-collapse of the Hypo Real Estate (HRE) group are considering legal action against former board members of its Dublin-based subsidiary, Depfa plc.
**Former directors of Depfa include ex-Central Bank head Maurice O’Connell and Frances Ruane, director of the Economic and Social Research Institute.
“We are examining compensation suits against the entire boards of Depfa and of Hypo Real Estate,” Detlef Bauer of Gleiss Lutz, legal counsel to HRE, told The Irish Times.
there is more
