Ireland has outgrown ‘Tiger’ tag
Ireland's problems are not unique and the country is likely to benefit from a further flow of foreign direct investment from the United States in the near future, the inventor of the term ‘Celtic Tiger’ said yesterday.
“You are not in this alone,” former Morgan Stanley analyst Kevin Gardiner told a conference. “Some are struggling every bit, and more so than Ireland.”
Mr Gardiner was speaking at a conference on the future of Ireland's financial services industry.
He said most of Ireland's problems were caused by foolish lending practices.
“It was just bad lending. It was reckless and bad lending.
“The good news is that it’s easier to fix than the opaque financial transactions in the international markets.”
Assets such as the property held by Irish banks were easier to value than some of the complicated investments which brought down banks elsewhere.
The difficulty of valuing assets was prolonging the crisis and wrongly leading some pension funds to close or to write down their values excessively, he added.
Ireland was no longer a tiger economy because the tiger term prop referred to economies which had not caught up with their neighbours Gardiner said.
“A tiger economy is a small economy growing quickly to catch up with its neighbours. I don't think it is helpful here anymore.”
Mr Gardiner believes that US companies will soon resume investing overseas. “US companies are throwing off cash and they will invest overseas,” he added. “World trade is recovering because the present crisis is a financial crisis rather than a |trade crisis.”