Sunday, 11 April 2010

Matthew Elderfield: going Gah-Gaa over Quinn?

Matthew Elderfield, who was appointed Irish Financial Regulator head in January, must be wondering what he let himself in for.

The country is hoxter-deep in financial ordure because of cronyism, clientism, and the unhealthy relationship between Fianna Fail, the construction industry and the banking sector. All dubious factors that the regulator of the time failed to address, resulting in ordinary people being saddled with debts, via NAMA, that the banks and developers will probably never fully pay back.

Elderfield’s brief was to organise a new, tighter ship; a financial watchdog that would sail a steady course, avoid the rocks and the sharks, prevent the whole economy ever being lost at sea again. Assuming it is ever fit to sail again, that is.

Now we have the Quinn Group fiasco. Under Elderfield's new watch, the Regulator has found it does not have enough reserves to honour all the insurance policies it holds. It is heavily in debt - despite Quinn’s claims that it is “profitable” – and owes €600m to bondholders and €700m to the banks.

According to the criteria required by the Financial Regulator, Quinn Insurance does not make the grade. It does not fulfill the basic requirements to operate as a seller of insurance, it is technically insolvent.  So, given the background of the mess we are in, and the lax standards of the past, the only option is to call in a permanent administrator, which Elderfield hopes to do tomorrow (Monday 12th April).

But lo! We now have various interest groups requesting that the regulator turn a blind eye to Quinn’s financial problems. Last week there were protests in Dublin and Cavan, where the GAA stuck its hurley in, with the Cavan County GAA Board chairman asking for “those in authority” to “take a holistic view of the impact that this decision [appointment of a permanent administrator] could have for County Cavan and the Quinn Group”.

A “holistic approach”, I ask you?   I think he means "a nod and a wink"… and look where that got us before. There is even talk of Anglo Irish, a bankrupt bank whose debts have been nationalised, buying out Quinn’s bondholders for €550m and injecting €150 million to deal with the company’s solvency issue. Bearing in mind that I probably have more cash reserves than Anglo has, that means the Government is thinking of using our money to bail out Quinn too. Our only hope is that Elderfield holds firm, and slaps them down. If that fails, we’ll need to look to EU competition law to be saved from our own gombeens.

It’s not that long ago since we had Mary Harney on TV telling us that we were economically closer to Boston than Berlin. That we were an open, business-friendly, laissez-faire economy – unlike the“socialist” economies of mainland Europe with their state support and subventions. If laissez-faire principles are applied, Quinn should go to the wall. As should have the banks.

Wonder what Harney is saying now?

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Anna said...

I've lost 7000 PA in my public service pay of 39,000, I am not at all bothered, I only have my self to care for: however my work mates Do Have children and sick relatives:1 friend Tom had to pay about 800 over 2 months in extra consultants fees, for extra vists for a sick wife,as VHI would only cover so many visits( as if she was greedy in needing more!):
it's people like Tom who are really being screwed, hes 1 grade below me, so even after 20 yrs earns about what do, Ánd has 2 teenage children as well: his pay has been cut 7000 And he pays for private health insurance- even tho we have a so called free health service,and VHI doesn't even cover all his wife's medical bills. Now he will be asked to pay More contributions towards an insurance scheme - Quinn- he and his wife were never in! Public servants were asked by our unions what we thought of the current pay proposals- ie get a pay increase some time in the future.. I said I don't mind the cuts At all- providing that the unions Demand that every penny of our paycuts/ the nation's tax take & the nation's pensiosn reserves that were given to financial crooks be GivEN back in their taxes, future profits, etc STRAIGHT INTO THE REVENUE COFFERS Every last penny.And stifF laws enacted to see all this the Third Biggest Bank bailout in the history of Planet Earth,- never happens again. I also demanded that the bank enquiry be speeded up and prosecutions made.Out on the streets people, these robbers get more and more outrageous.

Anna said...

‘British Match Girls at Bryant & May Strike- with the help of the Salvation Army’*
*No, this Is a real London newspaper headline - from 1888. It wasn’t just the long hours, low pay, and the dangerous yellow phosphorus
( which had already been outlawed in Sweden & USA factories- which used a harmless red form ) but the endless deductions from their pay : Deductions for dropping things , talking loudly, going to the loo without asking, ½ day deductions for just being late for work….the LAST Straw was when Bryant & May decided to erect a statute to Gladstone…and fund it by deducting a penny Every week from the match girls pay! The Government would do nothing- said it couldn’t interfere with the free market. Leading intellectuals supported them including George Bernard Shaw, within 2 weeks all their demands were met-and the British Trade union movement had been formed.
Oh, and the Salvation army set up their own rival match factory using totally harmless phosphorus-And with twice the wages.
1) That was all in Nasty Victorian Britain- and we are proud independent Ireland. We have our own gallant union officials now to protect our people. Imagine workers having their pay cut for no reason- just to fuel the profits of capitalists, oh and then to have to pay for the building of a useless folly such as a statue of Gladstone!
2) OK I don’t believe in our unions either…I said I don’t mind in the Least a pay cut…if our Unions Would only use the considerable numerical power of the public service to DEMAND that all public money given to banks is given back to the Nation’s coffers, ASAP.
Nope our unions are as ineffective as All our other institutions.
I do appreciate they are busy these days, what with a large increase in homeless and destitute, but has anyone given the Salvation Army a call?
I gather they are very good with workers who are shafted by an indifferent and ineffective government.

Anonymous said...

gday MR GM its wonderfull that irl has so many MARYS at the helm of the ship of state the name MARY suggests gravitas shure if they get a bit windy at times whats the harm its just nature, boston ,berlin, bejing, etc BERTIE had irl as the new switzerland only 18 months ago , shure biffo was in brussels offering loans to the greeks last week now thats windy in my book, almost as windy as anglo loaning money to quinn insurance, such a grand little nation so many MARYS

Anonymous said...

GM, what a strange country it is. I mean how could it get more unusual? A bit like a bad comedy. Theres a regulator NOW but hes about 15 years to late. Is this all part of the Irish sense of humour?


The Gombeen Man said...

@ Anna. Thanks for that on the Bryant & May... call in the Sally Army. I think our union leaders are up there with the rest of the establishment, to be honest, and they showed precious little appetite for organising the lowest-paid sectors of the workforce. Methinks they are too cosy by far.

@ BH. Yes, a mulifarious multitude of Marys is something we are blessed with... going right to the top and "Herself". And I don't mean yer one in the Park.

@ Dakota. I've often thought that myself. Pity the joke's on us, eh? Think I prefer Father Ted!

Ella said...

"A High Court judge today adjourned attempts by the financial watchdog to put Quinn insurance into permanent administration. Lawyers for the Financial Regulator told a Dublin court they had received fresh information from Quinn Insurance in the last hour and asked for a one-week delay."

Full Story:

The Gombeen Man said...

"Fresh information", Ella, eh? How timely. A cynic might say it sounds like a stalling exercise.

Anonymous said...

Big surprise. lol


Anonymous said...

Regulator has gone ga ga indeed, and so has this whole country if we think we should cheer on the destruction of one of Ireland largest companies and employers.
Mr Regulator was keeping watch of the English Regulatory System (FSA) for 7 years and jumped ship two months before Northern Rock came crashing down. Royal Bank of Scotland is now 84% owned by the UK taxpayer, who also owns Churchill and Direct Line, who are the two largest motor insurers in the UK. Not to mention the Llyods bailout.
Where will Elderfield be in two years times??? I think everyone will accept that he won't be here in Ireland and I would like toknow if he plans leaving a similiar mess behind him.
B. Kelly - Co. Offaly