Nama should have called a halt to NI property loan sale
The Stormont investigation into the sale of Nama's Northern Ireland property portfolio is like peeling an onion. As layer after layer gets slowly removed, the eyes just water more and more.
Irrespective of the outcome of the criminal investigation into allegations of corruption, the political and corporate circus act surrounding the entire saga has been truly appalling.
One of the most recent revelations threw fresh light on Finance Minister Michael Noonan's perspective on events. Up to recently, it seemed that despite a raft of letters, conference calls and meetings about the sale process, the views of Northern Ireland First Minister Peter Robinson didn't carry much weight in Dublin.
The DUP leader seems to have been all over Nama. He met with principals involved in bidding, wrote to the Department of Finance in Dublin and wrote to Nama both on behalf of a borrower and in relation to the sale of the Nama assets.
But every communication appeared to carry zero weight with Nama or with Noonan, who just passed on the communications to the state property agency which was actually responsible for the sale.
It has now emerged that in 2013, Noonan told Robinson, while there could be no exclusivity in the sale process, "there was in his view only one potential buyer" for the properties. This referred to an offer by investment group Pimco.
Noonan then pledged to discuss the situation with Nama chief executive Brendan McDonagh and said he was confident both administrations could work together with the potential buyer to overcome any difficulties.
This is extraordinary, because we now know that individuals in Northern Ireland had come up with the idea of selling the portfolio themselves and stood to gain £15m in success fees for pulling it off. We know they got Robinson's support and he was fully supportive of Pimco's efforts to buy it.
Pimco had even promised to wipe out the personal guarantees of Northern borrowers if its bid was successful. Wiping out borrowers' personal guarantees would reduce the security on the loans and therefore would make them less valuable.
This in turn would reduce the price Pimco should have been prepared to pay for the loans - a direct hit to Irish taxpayers.
The Northern Ireland administration had zero financial skin in this game - and in fact, the more cheaply the loans were sold, the better it would be for Northern borrowers and for kick-starting the Northern commercial property scene. Any positive impact upon the Northern Irish economy would have been of primary importance to Robinson.
On that basis, Dublin's interest was somewhat at odds with Belfast's interest. Noonan should not have engaged with Peter Robinson in any meaningful way in relation to matters around the sale.
Nama was the one selling the loans not Michael Noonan or Peter Robinson. Our Finance Minister should not have even discussed it with an outside political figure for whom the price achieved in the sale meant little.
Ultimately, Nama says it asked Pimco to leave the bidding process after it emerged it was going to pay success fees to a former Nama adviser. This was the correct thing to do.
The sale idea had gathered enough momentum in Dublin and in Belfast by then, that ending the sale process would have been difficult. But given what happened, it should not have gone ahead.
Central Bank wants another crack at Quinn
Better late than never, seems to be the mantra over at the Central Bank when it comes to investigations. Still battling with former Irish Nationwide Building Society boss Michael Fingleton over whether he should be sanctioned, the Regulator is now turning to former management at Quinn Insurance.
Quinn Insurance, like INBS, has disappeared into a taxpayer-funded black hole. The building society cost €5.4bn. Quinn Insurance is heading towards €1bn.
The real damage in Quinn Insurance was done under the previous regulator's watch back in 2008. Exactly seven years ago, Patrick Neary reached a "settlement agreement" with Quinn Insurance and its head, Sean Quinn.
Both were fined a couple of million euro for shifting around €380m of insurance company money into private Quinn accounts, to cover losses on the stock market.
Quinn said it was a loan and it was ultimately paid back, so what harm. Under the rules you cannot play around with insurance company funds like that without getting permission.
A basic investigation by the financial regulator at the time would have uncovered if Quinn had done this sort of thing before. It would also have uncovered the fact that insurance company assets had been cross- collateralised or effectively double pledged as security.
That didn't happen. Instead they just put the business into administration.
In February 2013, the Central Bank eventually fined Quinn Insurance €5m in an Alice in Wonderland-type move. The fine was for failing to maintain adequate solvency margins and having insufficient internal control mechanisms between 2005 and 2010.
The Central Bank should have fined itself for failure to do its job by allowing all of this to go on under its nose. The cost - €1bn. The fine was never paid because the company is bust.
Now the follow-up probe begins on whether management in the firm broke the rules.
They will be answering questions about decisions they made 10 years ago, in a company that collapsed six years ago.
Former Quinn Insurance executives could well begin by launching a legal challenge based upon the Central Bank's delay. Justice delayed is justice denied etc.
Health sector problems aren't confined to A&E
You would think with a rising population, an economy growing at 6pc per year and a pretty dysfunctional public healthcare system, that private health insurance would be the place to be.
Yet Aviva is pulling out of the health insurance market by selling its 70pc stake in Aviva Health. The other 30pc is owned by AIB, which may also be sold.
Aviva bought the business in 2008 for an estimated €45m to €50m at a time when it had a 7pc market share. That market share has risen to an estimated 16pc but the health insurance market is not in rude health.
Around 300,000 people have got rid of their health insurance since 2008 - despite the fact that 74,000 bought health insurance earlier this year to beat a new deadline that would have made it more expensive as they got older.
Premiums have been rising, as has the health insurance levy. The levy has shot up by 149pc in the last five years.
Aviva's pull-out may reflect Aviva Group issues rather than the health insurance market here. The British insurer clearly believes it can make better use of that capital elsewhere. This isn't triggered by new Irish Central Bank capital requirements for all insurance companies, because Aviva Group is regulated by the UK authorities.
It simply makes a statement that it believes it can do better using the capital in a different business, presumably in a different place.
Aviva Health's profits fell by 34pc to €12m last year and trading this year remains pretty tough, even with the influx of new customers earlier in the year.
GloHealth, the number four player in the market, is owned by Irish Life and would be a possible candidate to buy it. That may depend on whether AIB puts its 30pc stake on the block.
GloHealth has around 5pc of the market and might secure competition authority approval for the deal that would leapfrog it up there neck and neck with Laya in the number two spot.
No matter who buys it, Aviva's withdrawal suggests that real problems exist in the health sector and are not confined to trolleys in A&E departments.
Sunday Indo Business