Over the past week, The Currency has published four interviews that form the foundation of our journalism: in-depth discussions with decision-makers who shape the world of business. In rural Monaghan, Tom toured the warehouse technology manufacturing company of Sam Moffett – a third-generation entrepreneur in his family and in this industry – and met Karl O’Brien and Thomas Gleeson, who have raised €600,000 after just eight months since founding their e-commerce analytics start-up StoreHero.

Sean sat down with Derek Kehoe, who leads BNP Paribas bank in Ireland, and I interviewed European Commissioner for Financial Services Mairead McGuinness – you can also listen to her conversation with me in podcast format. All these interviews are superbly illustrated by our regular contributing photographer Bryan Meade. 

I want to dwell on the last two on this list because Kehoe and McGuinness both discussed at length a topic that is often overlooked and yet full of implications for Ireland as a small EU country with big ambitions in the finance industry: the long road towards a European capital markets union.

After interviewing Kehoe, Sean told me: “I’ve never met a man more passionate about capital markets union”. The banker said the lack of such a union was the reason why European banks were less profitable than their American counterparts. 

Banks take the risk of lending money to households and businesses and, once borrowers have established a pattern of repaying their loans (or not), lenders pass this stabilised risk on to other investors through various forms of securitisation.

“The American capital markets are fantastic. American banks can recycle risk very effectively into their capital markets,” Kehoe said. By contrast, European banks operate in a more fragmented environment where it is harder to raise fresh capital and generate new business with clients. Kehoe said fragmentation had increased since Brexit, with London’s central role leaking out to a variety of financial centres in various EU countries, including Dublin.

“This dispersion might not ultimately work in Europe’s favour, especially when competing against consolidated markets like New York, Singapore, or Tokyo on a global level. Therefore, it’s more critical than ever for Europe, from a capital markets perspective, to speak with one voice,” Kehoe says.

I approached the same problem from a different angle with McGuinness: Why can’t entrepreneurs make their search for venture capital EU-wide and increase their chances of raising funds under the best possible terms? She acknowledges that it is often easier for scale-up companies to move to the US in search of investors. Again, the EU’s response is progressing towards a capital markets union.

McGuinness leads legislative efforts to harmonise European rules to that effect. So far, they have focused on the higher level of the investment food chain, introducing common elements of regulation for investment funds or bond issuances across the EU, but new proposals introduced by the European Commission in December go further.

The latest package also aims to smooth out access to stock market listings and to non-bank finance, and to provide investors with a single EU-wide point of access to financial and sustainability information on companies large and small. McGuinness also wants to offer investors visibility on what will happen if they want to recover assets from a failed business anywhere in the EU: “It’s a long-term project and it involves nitty-gritty, important things like insolvency, because we don’t have one law on insolvency across the EU, we have 27,” she said. “We’re trying our best to harmonise parts of that so that there’s more certainty if there is an insolvency in a member state that you can recover some of the value.”

We know that Irish businesses and consumers cannot rely on Irish capital alone to fund their banking and investment needs competitively. A true capital markets union could be transformational for this economy and make it less dependent on US multinationals. Watch this space.

*****

Elsewhere this week, all sides in the RTÉ payments saga applied themselves to supplying endless energy for a controversy that should have been put to bed before this month started. As predicted here last week, Ryan Tubridy came to the only possible conclusion regarding the specific €150,000 in public money he received for hypothetical commercial work that he never performed and never will – he offered to hand it back. 

This offer, however, only came after four hours of grilling by two successive Oireachtas committees on Tuesday. As I’m writing this, there is no indication that this money has left his account yet. We are in serious Father Ted territory.

Tom, Rosanna and I have chronicled how Tubridy and his agent Noel Kelly on one side, and RTÉ executives (or at least those still in their positions) on the other side, have developed opposite narratives based on painfully slow releases of documents selected to minimise their respective levels of responsibility.

RTÉ’s refusal to furnish notes from crucial meetings on the basis that they were drafted by company lawyers, and therefore covered by legal privilege, is a particular hindrance to transparency in this case. It creates a dangerous precedent whereby people in any organisation potentially subject to public scrutiny has now got the message that it is sufficient for any information they want to keep secret to have it recorded by legally qualified personnel, and it will never see the light of day.

We are none the wiser as to which side is correct, and probably won’t be until former director general Dee Forbes comes forward with her version of events. When this happens, and whether this takes place before the Oireachtas or in another forum, such as a courtroom, remains unknown.

It doesn’t help that each side is also contradicting itself in its account of what happened. Kelly and Tubridy have no difficulty arguing in the same breath that the presenter’s broadcasting contract with RTÉ and his side deal with Renault were entirely separate, and also that RTÉ is responsible for everything to do with the Renault deal because the station brokered it at the same time as his main contract.

Across the table, RTÉ executives maintained that a “final offer” email from its financial officer and copied to other senior executives to guarantee the Renault deal was in fact not final but just part of ongoing negotiations. However, when asked why they agreed to pay Tubridy the particular amount of €75,000 under this side deal when no figures were included in documents drawn up to formalise it, they replied that it was because the figure was agreed in earlier negotiations. 

As Sam wrote yesterday, “redemption for RTÉ should be delivered in a scrupulously detailed plan for a proud public-service broadcasting utility”. Senator Malcolm Byrne offered his opinion on a future model for RTÉ in a column on Wednesday and our coverage will continue to contribute to this debate in the coming week, but there will be no focus on such urgent strategic planning until all sides grow up and put the Tubridy payments controversy behind them by honestly acknowledging what happened.

On a final note, while the amounts involved in that controversy are small in relation to RTÉ’s €340 million annual budget, they are obscene in comparison to the €25.20 some junior barristers get paid to appear in criminal cases. Their strike, partly conducted on Friday with more to come in October, has revealed a chasm within the profession and Francesca had the full story.