This is the first time we have had this conference outside Ireland. Alas, a persistent and ongoing lack of support and buy in  (financial, delegate or otherwise) from local finance and regulatory bodies plus other factors mean that in the medium term it is unlikely to return.

We have an agreement to host it in Monash University Center in Prato in Italy in 2014/2016/2018 and are in discussions with other centers for the other years.

We have over 250 delegates with the top attending countries:

Germany – 41 delegates

France – 38 delegates

UK – 30 delegates

USA – 23 delegates

Ireland – 17 delegates

40% of the delegates are returning delegates; 60% have never attended an INFINITI before (although there’s the odd few who attended GFC 2005 which we held in TCD). 52% of returning delegates also attended last year.

The conference has two excellent keynote speakers: Rene Stulz of Ohio State and Geert Bekaert of Columbia.

We have three special sessions, on Sustainable Finance, on Pricing Structured Products and on the Macroeconomic effects of Financial and Banking Reform. We also have a session on Meet the Editors, for those perplexed about the editorial and reviewing process (this may include editors…). A special issue of Journal of Banking and Finance will also be produced, guest edited by my good self.

There are 71 scientific sessions and a series of ongoing poster presentations. Some of the session titles  include

• Yield Curves and Spreads
• Volatility, Jumps and Events
• Sovereign Risk
• Shareholder Value
• Risk Measurement Regulation
• Regulation: Macro Perspectives
• Portfolio Issues
• Politics and Finance
• Modelling Volatility
• Modelling the Macro Economy
• Market Sentiment
• International Portfolios
• Integration: Future and Past
• Integration: Financing Effects
• Gold and Other Assets
• Global Banking Networks
• FTQ and Safe Havens
• Firms, Credit and Crises
• Financial Management and Performance
• Financial Geography
• Exchange Rate Pass Through
• European Banking and the Crisis
• Equity Market Volatility
• Emerging Markets and Capital Flows Corporate Capital Structure
• Emerging Markets and Banking
• Directors and Boards
• Culture and Finance
• Cross Asset Analyses
• Contagion in the Crisis
• Contagion in Equity Markets
• Contagion in Bond Markets
• Contagion in Asset Markets
• CDS
• Bubbles, Gold and Predictability
• Banks as Companies
• Banking Vulnerabilities
• Banking Transmission Mechanisms
• Banking Capital and Externalities
• Banking and Corporate Financing
• Bank-State Debt Relationships
• Bad Banks, Weak Banks
• Anomalies

A full conference programme (beta) is here to download.

€370 for uniform and books to come. In 68 fees were abolished but the cost remains. There is nothing to stop Minister Quinn mandating that all state supported schools adopt a simple uniform policy if we wish to have a school uniform. Black or navy trousers/skirt/sweater black shoes white or blue shirt. These are easily gotten and cheaply so. This nonsense of unique uniforms is exactly that..nonsense and an unnecessary expense.

A review of the new book by Antoin Murphy and Donal O’Donovan. (Paywalled but a free register) Takeaway…
We all partied
The bank guarantee was inevitable and not fatal
Our fiscal crisis is what matters
Groupthink and stooopids are to blame

An interesting re evaluation of the longterm effects of debt.

Here is the bottom line. Based on economic theory, it would be surprising indeed if high levels of national debt didn’t have at least some slow, corrosive negative effect on economic growth. And we still worry about the effects of debt. But the two of us could not find even a shred of evidence in the Reinhart and Rogoff data for a negative effect of government debt on growth.

Worth a read..here is their takeaway graph

Over the last two weeks we have seen the beginnings of the end of the present Irish macroeconomic business model. This has come about consequent to the growing concern, crackdown and outright confusion on international corporate tax. When your country is being labeled (however fairly or otherwise) a tax haven in the US Senate and when a large part of your (apparent) success is at least in part dependent on the underlying features that give rise to that description then the writing is on the wall, and the floor and the ceiling and round the wainscoting. This issue has been the subject of much discussion. One thing is clear – there are deeply held (if not deeply thought out) views on this. Indeed, it is clear to me that even advocating discussing the taxation of Multinational Companies (MNC’s) in Ireland is greeted with distrust bordering on hysteria. Even the mere discussion of it might cause terrible things to happen. Saying we must examine whether it is right that large companies can use the structure of Irish taxation to minimise their ultimate tax bills seems to be the economic equivalent of saying Candyman five times in front of a mirror.

What is the Irish business model? It is in large part built on the idea of being an attractive venue for foreign direct investment, for multinational companies. The idea, now into its 6^th decade, is that these export orientated companies will come here, and pay a low tax on corporate profits. In the meantime we will gain the benefits of employment and eventually (remember, its in its 6^th decade…) a cadre of Irish companies will grow and displace these MNC’s. A complex history underlies the tax issues here but the present situation is relatively simple. All Irish companies pay tax at 12.5% on profits in Ireland. Where the problem arises is that first there can be many many tax breaks that benefit a small number of companies (perhaps even one company); second there can exist companies that exist in Ireland but are not resident in Ireland for tax purposes ; third there are a web of dual tax treaties between countries that allow and to some extent encourage tax arbitrage, where entities shuttle profits around paying some tax here a little there and ultimately very litte anywhere. Arrangements such as the “double Irish“, whereby Irish companies can be tax exiles, simply exist to facilitate this tax roulette. We wash profits clean of immediate tax liabilities. The US Senate report on Apple, and the hearings into Starbucks, Amazon etc in the UK give some idea of the complexities here. Ireland is a central node in this web, and this combined with the reality that we are a low corporate tax country has drawn spotlights on us that we perhaps do not want.

Figures vary but the commonly accepted figure is that some 150k jobs are held in multinational companies. This is impressive, but the total labour force consists of some 1.85m people. Most MNCs are in the high and medium tech sector and that is not where people are employed. More people by far are employed in Knowedge Intensive Marketed Services (selling services) and Knowledge Intesive Other Services (mainly health and education) than in the igh tech sector. Yet these get relatively little play in the media as compared to the FDI dominated high tech sector. The bottom line is that we need to consider a hard question : is the MNC tail wagging the employment dog? We will not get out of this perennial recession by concentrating on FDI, or even on exports. Government ministers parading round announcing ten jobs here and a few dozen there will at the same time take actions that further depress demand in the domestic economy, and trumpet then the rise in parttime and ‘family’ jobs plus the effects of emigration on the live register as proof that this time is different and there is such a beast as expansionary contraction.

The export issue is also problematic for a linked reason. A large part of our trade balance is composed of chemicals. In fact, of total exports in 2012, 60% was accounted for by chemicals. Chemicals and related have long been suspected of being industries in which transfer pricing has artificially inflated the export figures. We facilitate transfer pricing in this country ; if you doubt this read S3.2 of the excellent report here. Absent the chemical exports we would just about break even on our balance of trade. A key aspect of transfer pricing is that it is encouraged and facilitated by tax arbitrage conditions. It gets worse – when we look at the rest of the balance of payments tables we see massive outflows. We apparently export 36b worth of computer services – nearly 50% of the value of agribusiness. We of course nearly offset this by ‘importing’ royalties and licenses of 32b, all offsettable as costs and in all likelihood the vast preponderance of which is internal to MNCs.

We need a mature debate on this. Not only is the MNC sector now distorting the economy, this flows through. We are well out of kilter with our European peers in terms of our tax take and structure. They all pretty much have a balance between GDP (including MNC’s) and GNP (excluding). We don’t. As a consequence when we calculate our tax take on GDP we flatter ourselves and look like a low tax country. When we examine GNP this is less so. But ever other country works off GDP data and they look at us and ask : what is going on. Joe Stiglitz, a nobel laureate and no enemy of Ireland has asked why countries such as Ireland which engage in tax based MNC attraction / profit washing should be bailed out. We might decry this but our own rhetoric denies the reality. We are perhaps now so used to saying one thing and meaning the other that we cannot even tell ourselves the truth. We cannot say at the same time that our MNC sector and its exports are real and not tax driven and then say that we must discount these for all purposes related to taxation and comparative economic analysis. Either these flows are real, in which case we need to treat them no differently to the local garage or the SME exporting to the UK ; or they are not. We cannot have it both ways and expect to be taken seriously.

Ireland, as we know, is not a tax haven. We know this because we are told it. And, our political and economic elite wouldn’t lie would they…

Some interesting figures here.  What was going on in LIT in 2002 (400k non HR) and 2007 (116k) ;  What is the story in Cork IT spending over 100k on non HR related legal fees every year since 2006? ; What about IADT, the smallest of them all, and its non HR legal spend in the last few years? ; similarly IT Sligo has a few non HR spends over 100k in 2009 and 2012?; DIT and WIT seem to be veritable gold mines for the lawyers ;  whats going on in Athlone that it spends so much on external legal fees related to HR issues?

Im sure that there are perfectly good explanations for these spending but it might be nice to see them. At times of stringent resource constraints one has to wonder also if these spends are wholly justified. It is in my experience and opinion a relatively easy way out to throw law at a management, HR or structural problem when the best solution might be an internal resolution. Lets bear in mind that while there has been change the legal profession still charges massive fees.

Mind you some US evidence is available which might give us a small boost. This suggests that there spending has fallen to below 2% of total.

Library spend might be expected to fall with greater efficiencies and less reliance on printed books etc. They might also fall as a percentage if they lose out in the internal fight for resources. So a lot more analysis is needed as to whether this is a good or a bad thing.

The data are below ; interpretation and analysis I leave to others.

Spend by Institution on Library Services as % total institution spend

Spend by Institution on Library Services €000

Spending per FullTime Student per annum

We don’t want them in restaurants, or in the pub. We don’t want them in some hotels or in shops in their nasty buggies – what, cant they walk?

We throw up massive barriers to adoption ensuring that kids stay institutionalised rather than having a chance at a family.

We don’t want, as a society, to allow the creation of a economic structure that allows parents the choice to either stay at home full time or to entrust them to the care of a decent system of child care.

We don’t invest in schools instead allowing literal generations of children to be educated in rotting prefabs. We don’t even provide a system of national education, instead fobbing it off to religious groups over decades.

We don’t have  a decent nationwide system of sports facilities, again relying on voluntary sports organizations some of which have only recently emerged blinking from tunnels of sporting and actual sectarianism. We don’t have playgrounds, and seem incapable of planning for children going to school despite there being 5-6y warning from birth to school.

We don’t like it when unmarried mothers have more of them and have at least moved on from snatching these kids and imprisoning the mams, instead happy now in the enlightened eras to allow them to stay together in dire poverty .  We couldn’t be bothered to invest over decades in ameliorating the deepest poverty, instead happy to fling the resultant broken kids into the savage maw of lunatic religious or latterly into a creaking state system of prison. Actually, we kinda hope that they would just overdose already and save us some money.

We don’t like the idea that we might have to mind them, instead wanting to use schools as surrogate homes and wonder why the hell the teachers get all that time off when they could be minding teaching our kids. We don’t want kids to have a say in how things are run, even big kids, so we ensure that we run referenda and elections when they cant make it.

We don’t want their voices heard so we don’t bother appointing voices of kids (as opposed to some of the excellent voices for kids) to the Seanad, instead appointing people that would make Caligula’s Horse seem like Talleyrand.

We don’t want them to play, ensuring that absent playgrounds the roads and estates are determinedly child surly to put it at its best.  We didn’t plan when we had the money and we cant be bothered now to plan for integrated housing estates that have the amenities for families instead treating them as combination battery housing/investment portfolios

We dont want kids seeing their parents, instead creating and fostering economic structures and social mores that encourage ultra commuting and the necessity for both parents to work. Meanwhile a soi disant socialist minister is busy dismantling the child support networks such as they are.

We don’t want them to grow up healthy, not bothering to put in place proper nutritional programs. We are happy to have sweet and tuck shops in schools and to allow schools to be ringed by chippers and kebab joints  – sure didn’t we have no dinner just a jam sangwidge between 9 of us and we had to make the jam ourselves etc etc etc..

We don’t want them to be healthy as that would involve a decent national children’s hospital which has served as a most useful political football over decades. Anyhow we don’t want them to survive as we can’t be bothered to invest in the normal quota of high end medical staff in the hospitals we have. God, or the market (there seems to be a conflation of these in some peoples minds) will provide. We don’t want them to stay sane, as that would require investment into childhood psychiatric and psychological services (anyhow the evidence is that the fine ‘minds’ of dail eireann are not at all convinced that mental health is a real issue…).

We don’t want them to be cluttering up the streets when they cant get a job, and we sure don’t want to bother with all that expense and trouble of intervening in youth unemployment blackspots. Sure didn’t we have to emigrate and there was no Ryanair then, no we had to SWIM to holyhead…

I could go on but I need to go to work. The Primetime report last night on creche abuse was horrific. It was enough to make me as a parent cry and to feel murderous rage that someone would do these things to smallies. But then, when I woke up this AM, I realised… this is part of what we are. We dont, as a nation, like kids.