- Dec 5, 2009
... I was going to send the following letter to the European Commission. Any feedback or comments on the letter before I send it would be appreciated. Thanks.
COMP State Aid Registry
J-70, Office 3/225
70, Joseph II Street - 1049 Brussels
30 September 2010
Dear Sir, Madam,
RE: MARKET DISTORTION AND COMPETITIVE CONCERNS RELATING TO THE APPOINTMENT OF MR. MIKE SODEN TO THE NEW CENTRAL BANKING COMMISSION BEING SET UP IN IRELAND.
I am writing to express concern at the appointment of Mr. Mike Soden to the new Central Banking Commission. His designs and intentions with regard the banking sector are in the public domain, and I would like to draw your attention to these facts.
In summary, Soden is on record as having stated that he favours instating a mechanism for valuing property that is removed from the normal market mechanism. In addition, that he favours a consolidation of the two primary Irish retail banks to form what he terms (misleadingly), a ‘national champion’.
In an interview with the largest national Sunday newspaper in Ireland on October 12th, 2008*, Soden set out his views on the need for ‘a state-backed property company’ to address the problems as he saw them in the property market and the banking sector (it would be fair to say that NAMA as envisaged in Peter Bacon’s report of April 8th, 2009 reflected well these views expressed by Soden). I quote verbatim the substance of these views as recorded in the Sunday Independent interview:
"The purpose of New Co (NAMA) is to create an entity that is accredited with placing value on property in Ireland… This company will then become the principal marketplace for buyers and sellers in the future…
…Crucially, New Co (NAMA) would determine a price for these properties… This will lead to the establishment of a mechanism for valuing property in the current market…
… This distressed property holding company is going to need a huge lump of dough. Soden believes that it could be funded by the ECB or Central Bank of Ireland..."
Now, whether Soden’s proposed solution (consisting essentially in the advancement of a state supported and funded monopoly) is workable or not, is not for me to say. What I will say is that the problems in this country stem from more than fiscal and monetary mismanagement. Rather, they stem from social and political factors. These factors have become stark in the current economic climate and there is hope that they will be addresssed. This hope has just started to show itself, and an appointment like this could easily crush it.
* Merger of AIB and BoI is the only way to save sector - Analysis, Opinion - Independent.ie