Financial Regulator admits failure on banking (Irish Examiner)
The Financial Regulator put its hands up yesterday admitting it failed in its duty to protect the banking sector. It said also it was too slow to react to cool down the property bubble and promised a much tougher regulatory regime.
"In retrospect, it is clear the actions we took were insufficient and were not taken early enough," said Financial Regulator chairman Jim Farrell at the publication of the group’s 2008 annual report in Dublin.
He stressed that a much tougher hands-on policy with the banks was already in place with four regulatory staff working practically full time in each of the major banks.
In its report for 2008 the Regulator said that it had "fundamentally changed the way we regulate".
This crisis struck harder and faster than anyone imagined and by the end of September 2008 the Government had to guarantee more than €400 billion of loans and deposits on the books of the seven Irish financial institutions.
In early January the State was forced to nationalise Anglo Irish Bank and has since pumped up to €7bn in preference shares into Bank of Ireland and AIB.
Since then, formal investigations into directors’ loans at Anglo Irish Bank, the circular transactions between Anglo Irish Bank and Irish Life & Permanent and the unwinding of contracts for difference in Anglo involving billionaire business man Sean Quinn, are under continuing investigation.
Mary O’Dea, acting chief executive of the Regulator said the latter two items ere the subject of investigation by the gardaí for "alleged criminal activity". She said she was aware of concerns among the public that white collar crime in Ireland seems to go unpunished.
Early on, the Regulator decided some of the allegations regarding Anglo were best dealt with by the gardaí. With so much information now computerised, the investigations would inevitably take time, she said.
"It will take what it takes", she said, but the Regulator was "absolutely committed to ensuring that all of the issues raised are fully and thoroughly resolved.
The Professional Insurance Brokers Association said the attempt by the Financial Regulator to "evade responsibility for its failures in recent years is disingenuous in the extreme".
Ruairí Quinn, Labour spokesman on education, said the report is "graphic testament" to the failure of the regulatory regime for the banking and financial sector. "Unfortunately the report does not adequately acknowledge the extent of the failure of the Regulator to detect and prevent the sort of irresponsible banking practices that have exposed the Irish taxpayers to a potential liability of more than €440bn," Mr Quinn said.