LAPFF blames ‘defective’ accounting rules for 2008 Irish banking crisis

first_imgLeinster House, home to the Irish parliament for 100 yearsThe fallout from the inquiry has potential repercussions for the FRC, which has effectively served as the de facto accounting standard setter for the Irish Republic.Ireland shares a near identical company law framework with the UK. In addition, banks in both countries follow the same EU-endorsed IFRSs.Bush, head of governance and financial analysis at PIRC, told the committee that Ireland was in an “anomalous” position, in that the two countries were “intertwined within the FRC structure”.He explained that Northern Ireland – which is part of the UK – and the Republic of Ireland were “treated as one and, therefore, the UK and Ireland are treated as one”.This has produced, he claimed, “the bizarre anomaly that the Auditing Practices Board, whose chairman is appointed by [government] in London, [is] issuing guidance on how to audit the Central Bank of Ireland”.Bush explained, that during his tenure as a member of the former UK Accounting Standards Board’s Urgent Issues Task Force, he contacted Ireland’s former finance minister Brian Lenihan to warn that decisions taken by a committee in London were affecting two jurisdictions.“I thought it was only right that I showed a degree of accountability to both states rather than just the one in which I happened to be born and lived,” Bush said.The LAPFF’s long-running accounting disputeThe LAPFF – which represents 78 public sector pension funds with £269bn (€302.5bn) in combined assets – has been challenging accounting standards setters for more than eight years. In December 2013, an LAPFF report entitled Banks Post Mortem – Follow Up claimed the UK’s accounting framework for listed companies had allowed major banks to keep substantial losses out of their reported net income.The analysis also repeated the forum’s long-standing allegation that the IFRS accounting framework ran counter to UK public law and long-term investor interests.The release of the report followed an earlier LAPFF study in December 2011 into banking losses in the UK and Ireland, titled UK and Irish Banks Capital Losses – Post Mortem.The 2011 report by LAPFF into the accounting for financial instruments by major banks focused on the collapse of the capital adequacy regime of banks in the UK and the Republic of Ireland. He said: “The letter stated that they know what company law is, that they do not agree with it because they believe it to be outdated, that they are setting standards that are going in a different direction and that they believe the law should be changed to catch up with the standards.”The Irish parliament wants to establish whether the IFRS applied by the country’s banks provided sufficient protection for creditors and shareholders. Politicians are also keen to establish whether the bailout of the Irish banking sector in 2009 was lawful given that critics of the move have argued that the banks were insolvent.The banking crisis that hit Ireland in 2008 eventually led to the country seeking assistance from the International Monetary Fund and liquidity support from the European Central Bank.John McGuinness, chairman of the joint committee, said the Irish public had picked up the tab for the banking system bailout that they should never have entered into, due to a potentially flawed and illegal accounting model. “We are paying back a debt that we should not be paying back,” he said.The FRC and Ireland UK local authority pension funds took their long-running battle with accounting standard setters to Ireland this month as part of an inquiry into the country’s banking crisis.Giving evidence to politicians, Local Authority Pension Fund Forum (LAPFF) representative Tim Bush accused banks and auditors on both sides of the Irish Sea of following a defective accounting model that ran counter to company law.The LAPFF has previously argued that international financial reporting standards (IFRS) produce fantasy or illusory profits that mean companies are at risk of paying out unlawful dividends from capital. It has obtained a legal opinion on this point, but the UK’s audit regulator, the Financial Reporting Council (FRC), has disputed this interpretation of the law. In his evidence to a joint Irish Seanad and Dail parliamentary committee, Bush referred to a 2005 letter from Ireland’s Accounting Standards Board to the UK Department of Trade and Industry.last_img read more

Read More »

Devon Sea Wall Needs Repairs

first_imgEngineering teams from Network Rail and BAM Nuttall are about to begin repairs to four breakwaters in Dawlish, Devon, protecting the railway running along the coast.The breakwaters that require repair are at Boat Cove, Coastguards Point, Colonnade Underpass and Langstone Rock.According to the Network Rail, the works will start next month taking approximately six months to complete.Mike Gallop, director of route asset management for Network Rail said: “This section of the railway is vital for many residents and communities in Devon and Cornwall and we are committed to safeguarding it for future generations.”“However, it’s going to take us time to work out the best ways to protect the railway and then deliver these works, so we wanted to find ways now to make the railway more resilient than it currently is. By repairing the breakwaters we can give some immediate protection to the sea wall, the railway and town behind it, and we are looking at how we can put in place immediate, short term measures to reduce the risk of a landslip on the cliff at Holcombe,” added Mike Gallop.Network Rail and its engineering experts will be out and about in the community to explain the investigatory work that they are doing over the next few months as well as the immediate works being started in November to strengthen Dawlish sea wall:30 October – Dawlish Methodist Church, Dawlish, EX7 9PB from 14.30-17.30;7 November – Teignmouth Library – 19A Fore St, Teignmouth TQ14 8DY from 16.00-19.00;15 November – Holcombe Village Hall, Holcombe from 16.00-19.00.last_img read more

Read More »

USC has room to improve this year

first_imgThe college football season follows a predictable pattern each year. Early on, a number of teams have standout performances, with each squad making their case for elite status. Then injuries, upsets and conference play start, and the season begins to fall into focus. This generally happens at the end of September, when almost everything crystalizes.This year is no different. We learned a lot in the first month. On a national level, elite defenses are few and far between this season. It seems like 56-49 shootouts are the new norm, an upgraded version of the old 17-13 grind-it-out slugfest.At the Pac-12 level, it is abundantly clear there will be no easy victories this season. Combine a collection of coaches of the highest caliber and a crop of phenomenal quarterbacks leading explosive offenses, and you have the toughest conference schedule week in and week out in all of college football.Such a demanding schedule casts a bleak shadow over USC’s upcoming games. The idea was that if the Trojans could get through Oregon State and Arizona State, October would be a cakewalk. But with the emergence of Arizona, Colorado and Utah as viable competition, gliding through October looks to be a demanding task.That’s what we know. Unfortunately, there are still a lot of questions about the USC football team. While the 35-10 victory over the Oregon State Beavers appears to be a resounding blowout in the Pac-12 home opener, statistics certainly do not tell the full story of the matchup.It was certainly a great bounce-back win coming off the bye, but USC’s victory left me feeling a bit uncertain about the rest of the season. There were positives, such as the freshman class taking another giant step forward. The collection of skill position players is the most impressive group of freshmen in a long time, anywhere. The linemen are continuing to progress, and there is not much more to say about cornerback-wide receiver Adoree’ Jackson, other than that he is one of the best freshmen in the country.There are other bright spots on offense. Junior wide receiver Nelson Agholor and redshirt junior running back Javorius “Buck” Allen are dependable and dynamic. Redshirt junior quarterback Cody Kessler shook off a first half where he was aiming it instead of throwing it, to look like his usual efficient, effective self in the second half. It appears that sophomore running back Justin Davis finally has his burst back, and junior Max Tuerk is developing into an All-American candidate as a center.On defense, sophomore safety Su’a Cravens is phenomenal. He might be the best safety in college football, and if Saturday was any indication, he is gunning for most talented linebacker as well. Besides junior defensive end Leonard Williams, Cravens seems to make more plays in the backfield than any other Trojan. That is where the problems start, though.I understand the preseason All-American is a dynamic, physical specimen. But a safety-linebacker hybrid should not be making more stops behind the line than the combined efforts of the defensive line and linebacking corps.Though USC did not surrender a touchdown on defense, I can’t help but feel unsettled about the Trojans’ defensive unit. Whether it was junior cornerback Kevon Seymour failing to turn repeatedly on back shoulder throws or the bevy of avoidable penalties on an assortment of Trojans, the defense was underwhelming. This was not a dominant performance by any stretch of the imagination.One bright spot was the tip by Jackson to emerging sophomore safety Leon McQuay III, who then secured the interception in the endzone. That duo will be the cornerstone of a stingy secondary for the next few years. The pick by McQuay had shades of Richard Sherman and Malcolm Smith for the Seahawks against the 49ers last season, which was only fitting as Smith led the Trojans out of the tunnel.Overall, time will tell if the ’SC defense is suited for the 3-4. The Trojans seem to have trouble defending screen passes, which happens to be an Arizona State Sun Devil specialty. If ASU has its starting signal caller back next Saturday, the Trojans have to step it up in order to win.Forget UCLA and Notre Dame, there are no certain victories over the next six weeks. USC could conceivably hold each team they play to low double digits like Oregon State and Stanford, or they could give up close to 40 like they did against Boston College. Four games into the year, the outlook of the rest of the season is hazy at best. While we know the future of the program is incredibly bright, the present has yet to be determined.The direction of this year is not dependent on the defense though — it is up to the offense. Even though they sustained multiple drives on Saturday, the offense is not truly a fluid mechanism yet.This could be the play calling or it could be the execution, or a combination of both. Either way, the offense will need to step it up in Pac-12 play. Maybe throwing it more to sophomore wide receiver Darreus Rogers, who happens to score almost every time he touches the ball, would be a step in the right direction.It seemed that the team found a groove from the second quarter on, once Kessler started moving out of the pocket and putting some zip on his throws. Here’s hoping that continues, and Sarkisian and Kessler prove that they stack up near the top when it comes to quarterback-coach combinations in the Pac-12. After all, 52-49 gets you the same result as 10-7 — a victory. At the end of the day, that’s what matters. Jake Davidson is a sophomore majoring in economics. His column, “Davidson’s Direction,” runs Mondays. To comment on this story, email Jake at [email protected] or visit dailytrojan.com.last_img read more

Read More »