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New regulator may be 'outsider' (Irish Examiner)

04 November 2011

FINANCE Minister Brian Lenihan is expected to consider candidates from outside Ireland as a replacement for financial regulator Patrick Neary, who will step down at the end of the month.
Following criticism in some sections of the international media of Ireland’s financial system as “cosy capitalism at its worst” a new set of guidelines on selecting a financial regulator are to be unveiled in the coming weeks.
The guidelines are expected to contain a recommendation that international candidates are included in any short list of prospective regulators considered by the minister.

A Department of Finance source said that Mary O’Dea, current head of consumer affairs at the authority, will continue as an interim regulator until a new appointment, which will not be made until the new regulatory framework is in place.
Under the current rules the board of the Irish Financial Services Regulatory Authority advertises for the position of regulator who is then approved by the minister. This is expected to be scraped with the Department of Finance taking the lead in the regulator’s appointment in a “fully transparent process”.
Independent senator Shane Ross said: “We can’t have a situation, I don’t think, where the minster suddenly makes the quick appointment from inside the central bank or the financial regulator to succeed Mr Neary. I think he is going to have to go outside to advertise it and look for someone external, someone independent and someone who hasn’t like Mr Neary unfortunately spent the last 35 years in constant contact with the bankers with whom he became I think rather over sympathetic.”
On Friday, the financial regulator announced that chief executive Patrick Neary will retire at the end of the month as an inquiry showed the agency failed to take “appropriate and timely” action in relation to directors’ loans at Anglo Irish Bank.
The review of the agency’s “regulatory approach” follows the resignation of Seán FitzPatrick as Anglo Irish chairman in December after he failed to fully disclose loans from the bank over an eight-year period.
Small business group ISME yesterday called on the Government to sack the board of the Financial Services Regulatory Authority for “its gross incompetence”.