Anglo deposits deal stank from the very beginning
With criminal convictions secured against three former bank executives for the Irish Life & Permanent /Anglo Irish Bank €7.3bn deposit conspiracy, it is timely to look back at just how hopelessly inadequate the responses of the boards of both of these banks were in their handling of the crisis.
Details emerged in early 2009 that a multi-billion euro deposit transfer had taken place which saw money lent by Anglo Irish Bank to Irish Life & Permanent, and then the same amount lodged on deposit with Anglo through Irish Life's investment arm - which made it look like a client deposit, as opposed to an inter-bank deposit.
Whatever about the motivations behind the transactions it was pretty clear they had the effect of flattering Anglo Irish Bank's balance sheet in a way the court has now found to be misleading to investors and a conspiracy.
IL&P's then chief executive Denis Casey and then finance director Peter Fitzpatrick were among those charged. Fitzpatrick was found not guilty, while Casey was found guilty last week.
On February 13, 2009 the board of IL&P met in emergency session and issued a statement. It said Fitzpatrick had resigned, as had the head of treasury, but the board had refused to accept the resignation of Denis Casey.
Ironically, it had backed the man who has now been found guilty of a conspiracy to mislead while two of his subordinates were sacrificed.
Most bizarrely, it was clear from the statement that something "wrong" had been done - but it wasn't taken seriously enough to warrant the departure of the chief executive, despite (as we now know) a crime having taken place.
The statement said: "The board has expressed its strong disapproval of and disappointment with some of the specific measures used to support Anglo Irish Bank during 2008 and the fact that the Board itself was not informed of the specific manner in which such support had been afforded to Anglo Irish Bank."
Then IL&P chairwoman Gillian Bowler went to say in the statement: "However, in providing support to the broader financial infrastructure, mistakes were made - for which I and the board apologise unreservedly."
It didn't say what mistakes were made, whether they were going to conduct an investigation or call the cops.
The board of IL&P simply got it all hopelessly wrong. It accepted the resignations of two senior executives, effectively sacrificing them, neither of whom had broken the law, and declined to accept the resignation of its chief executive.
The board at the time was made up of very experienced corporate professionals and even included Liam O'Reilly, a former head of financial regulation.
Finance Minister Brian Lenihan saw it differently - instantly. He summoned Gillian Bowler to his office for a meeting and delivered a very strong message that the board's response had not been commensurate with what had transpired. Within 24 hours of the IL&P statement, Denis Casey had resigned.
There is no doubt that the deposit transactions were complex. Grey areas can emerge in questions of corporate wrongdoing. And prosecuting these cases involved the longest trial in Irish court history.
However, a cursory look at the facts, even back then, would establish the seriousness of what had transpired and the potential damage it could do, not only to both banks, but to the reputation of Irish banking as a whole.
Sometimes, even in complex financial matters, if it walks like a duck and quacks like a duck, it is a duck. These transactions stank from the word go.
Yet, if IL&P's board weren't the only ones who called it wrong. Casey has claimed Central Bank officials had urged him to support Anglo, even if they didn't point out specifically what lines should or should not be crossed. And the trial judge said that, if pushed, he would believe the evidence of Casey in relation to the attitude of the Regulator.
In fact the IL&P statement of February 13, 2009 alluded to the "green jersey" agenda when referring to the resignation of its former head of treasury, David Gantly.
"The board acknowledged the extremely high level of integrity and professionalism shown by Mr Gantly throughout his service with the company and fully accepts and recognises that he too had acted in line with his genuine understanding of the express wishes of the Regulatory Authorities in attempting to provide support for the wider financial sector in Ireland," the statement read.
The board of Anglo Irish Bank was also stuffed with experienced corporate blue bloods - and it too called many things hopelessly wrong during the crisis.
Unfortunately, former Central Bank governor John Hurley and former financial regulator Patrick Neary could not be questioned on the details of this case and others during the banking inquiry because criminal proceedings were in train.
The biggest question is how so many experienced people got it so much, so badly wrong.
Boomtime rents hurt a lot more second time round
The housing crisis has reached a new hiatus as rents in Dublin are now on average higher than they were in 2007. But incomes are not necessarily higher than in 2007 - and when you take higher taxes, such as the USC into account, the rent burden for many people is much greater than it was in 2007.
For example, a single person earning €40,000 per year in 2007 took home €32,120 after income tax. A single person on the same salary today takes home €30,960 after tax.
Somebody on €60,000 in 2007 took home €43,140 after tax. Today they would take home €41,040 - or €175 per month less.
CSO figures show that total wages earned in Dublin in 2007 were €26.9bn. By 2014 they had sunk to €24.9bn or €2bn less. Average disposable income per person in Dublin (excluding rent) had fallen from €22,742 in 2007 to €19,431 in 2014.
Many landlords, but obviously not all, have been creaming it. For example, an investor who bought an apartment in Dublin in 2012 (at the bottom of the market) has seen it rise in value by 53pc.
Around half of all money paid to private landlords in Ireland is paid by the State through various rent supplements and allowances. Some landlords are not creaming it. Many became accidental landlords on foot of properties they bought to live in themselves during the boom. They are sunk in negative equity and they need to charge maximum rent to keep up bank repayments.
So the billions in extra money being paid in higher rents is going to landlords who are creaming it, or to banks which have been bolstered by taxpayers and arguably no longer need the money.
This is economic waste on a grand scale. It is holding back saving, investment and spending that would genuinely help the economy. The Government has watched this financial car crash happen and failed to act.
New measures will come as too little too late.
Storm clouds roll in over Battersea cash machine
The billions expected to be made from Nama's sale of the Battersea Power Station in London might not be quite as many as previous touted. Acquired by a Malaysian consortium to develop thousands of apartments, this end of the market in London is softening.
The first phase of development at Battersea was snapped up in advance - but some have struggled to sell on the apartments, as concerns grow in the City about the housing market.
Luxury flat developers, including those at the Battersea site, are discounting apartments to offload them. Barratt Developments which is behind the Nine Elms Point development at the site is offering discounts of £32,149 on selected homes.
Where will it all end?
Sunday Indo Business