Opening Bell: Troika's urgent lepreconomics call, BoI deposit charges, Frankfurt beating Dublin in Brexit race

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The International Monetary Fund (IMF) requested an urgent conference call with the Department of Finance after the Central Statistics Office (CSO) reported last month that Ireland's GDP had jumped 26.3% in 2015.

The Irish Times reports that Michael McGrath, the IMF's alternate director for Ireland, emailed the department's chief economist John McCarthy days after the controversial data was published in an attempt to set up a next-day call with the head of the IMF's Ireland mission, Zuzana Murgasova.

The IMF was finalising its annual article IV review of Ireland at the time.

In the event, a meeting could not be arranged that early, resulting in a note being added to the report saying that its Irish recommendations were not impacted by the upward GDP revision.

 

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Eurostat, the European Union’s statistics agency, will now send a mission to Dublin next month to investigate the CSO's latest economic figures, according to the Irish Times.

An internal Eurostat document said that while initial explanations provided by Ireland for the massive increase in GDP – dubbed "leprechaun economics" by the Nobel Prize winner Paul Krugman – “look plausible”, the Luxembourg-based body wants its own verification process.

Irish GDP is calculated by the CSO using Eurostat methods.

The document, obtained by the Irish Times, states:

“The Irish authorities have already indicated that they will provide full access to all information, including that under statistical confidentiality, to Eurostat staff."

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Investment professionals believe Frankfurt will reap more benefits from Brexit than Dublin.

A new study of 2,000 global professionals does, however, foresee plenty of positives for the Irish capital due to the UK's decision to leave the EU.

The CFA Institute reports that while 69% believe Frankfurt has the most to gain, 62% feel that Dublin will be one of the chief beneficiaries of the referendum result.

Over 80% of those surveyed expect London to lose out. Some 59% of respondents anticipate the fragmentation of the UK, with close to half stating that Brexit would pave the way for further EU withdrawals.

 

 

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Bank of Ireland will become the first Irish financial institution to charge its customers for deposits.

The bank will charge large corporate and institutional customers for deposits of €10 million or more from October.

The Irish Times understands that a negative interest rate of 0.1% will applied to these deposits by the country's biggest bank, which is 14% State-owned.

The move comes after the European Central Bank started charging institutions 0.4% to hold their cash overnight.

BOI has said it has no plans to apply a similar charge to personal or SME customers.

Meanwhile AIB and Permanent TSB have both said they have no plans to apply negative rates to any of their customers.