Inside the world of business
Tests mean Anglo avoids scrutiny
THE PUBLICATION of the results of the Central Bank’s stress tests on Thursday means that a truly dismal set of results from Anglo Irish Bank did not get the scrutiny they perhaps deserved.
First up is chief executive Mike Aynsley’s €974,000 pay packet, which makes a mockery of the Government’s €500,000 cap.
The inclusion in his package of eight air fares for his family in Australia to visit him sends out all the wrong signals.
More worrying is the revelation that the bank paid €62 million in fees to outside consultants for work on restructuring, assets transfers to the National Asset Management Agency and “legacy matters”. The Anglo carcass has provided a rich feast for the professional classes.
A significant, but unquantified, portion of the €62 million payment related to the preparation of four restructuring plans for Anglo Irish Bank, three of which had to be shelved because the European Union rejected them.
This is an issue that is worthy of further ventilation. Did the commission keep changing the goalposts or were the first three plans just not much good?
Either way, the bank does not seem to have been listening to the commission.
Aynsley and his team have questions to answer because if there was any justification for hiring them at the sort of stratospheric salaries that they receive, it is because they know a thing or two about restructuring banks and dealing with bodies such as the commission.
That the people who told us in no uncertain terms that anything other than their preferred option – keeping Anglo going via a good bank/bad bank split – was an act of folly remain in charge of the bank is curious.
That they will earn massive salaries over the next 10 years to implement a plan that is the exact opposite of the one they said had no viable alternative is just plain mystifying.
Failure once again appears to be being handsomely rewarded, which can only sustain public cynicism about the banks.
Print industry monitors 'NY Times' web strategy
THE EFFECTIVENESS of the paywall that the New York Timeshas thrown up around its online content this week will be closely watched by the rest of the newspaper industry.
It is widely accepted that newspapers – even major players like the New York Timeswhich generates annual revenues of more than $2 billion – can no longer afford to give their product away for free online.
Silicon Valley thinkers may opine about how “free” can be the basis of new web business models, but the collapse of the US newspaper industry in the face of web competition shows no publisher has figured out how to make free pay.
It will be some months before the paywall’s success can be judged, but the early signs are not encouraging. It has been widely reported that the newspaper spent $40-$50 million developing the technology to charge readers of its online newspaper. Technology analysts expressed surprise that the system needed to cost that much.
The New York Timesis not simply putting all its articles behind the paywall.
Casual readers will be able to get up to 20 articles a month for free but after that they will be asked to pay. New York Timesstories will also show up in search engine results and can be linked to and from social networks like Facebook and Twitter.
This nuanced approach has enabled a Canadian software engineer to develop a free software program called NYT Clean, which enables people to access as many articles as they want for free.
Less technical readers who pay the subscription face relatively steep fees of $15 – $35 a month, depending on the package.
That means the most loyal readers are the most likely to pay. As a result, the New York Timesrisks alienating its core audience if it becomes too easy for others to get in for free.
The reality is not everyone will pay for news online. The New York Timesis trying to filter out those who will, but the stakes are high for the newspaper and the rest of the industry.
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