10th March 2021: The Government and Central Bank have acted. Their actions are appropriate. Now it is time for Davy to act.
For the sake of the firm, it's employees, and indeed the effective continuation of a domestic Irish capital market, the appropriate next step must be an equity divestment by any and all of the 16 participants in the sanctioned trading deal in Davy.
How that deal is done will require deal making skills of an exceptional nature perhaps. Davy it seems to us should themselves come up with a plan that sees equity (and control) transferred from those sanctioned, possibly within the firm, or with outside investors who have credibility for the continuation of the trusted advisory role that is essential for a broking firm.
In the case of Davy it is particularly important that this be the case, as there must be no residual suspicion lingering that an old order of an insider trading culture remain.
The possible interest of others, such as Bank of Ireland, and indeed Davy's own staff may be in play, but it is imperative that a quick deal is done.
Only and if such happens should a restoration of the bond trading licence by the NTMA be contemplated.
Some (only some) of the resigning office holders have publicly stated their regret, or remorse over the deal, (the resigning CEO Brian Mc Kiernan, in fairness, accepted responsibility in his resignation statement in admitting a damaging effect a continuation of his role would have). The other stakeholders can make their regret and desire to seek atonement evident through their actions in divesting themselves of any remaining equity in the firm, rather than mere words.
Those actions, quite simply can, in the first instance, be to offer their equity at a fair and effective (dealmaking) price to the remaining staff of Davy, or to outside investors. This should happen without delay as every passing day without a resolution will erode the confidence of the markets (Davy's clients) to the detriment of the entire market.
It’s not just the survival and welfare of Davy that depends on this action it is the continuation of a functioning local public equity financing market in Dublin, and the continuation of a local funding window for the sovereign.