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Incompetent people rewarded by incompetent Government - Morgan

16 July, 2010

Speaking today before the publication of reports by the Public Accounts Committee in relation to the bank guarantee scheme that reveal that the former regulator Patrick Neary told the Taoiseach that Anglo was not insolvent and that it had enough assets to cover its debts, Sinn Féin Spokesperson on Finance Arthur Morgan has criticised the culture bred by Government where financial markets became the judge of how regulation was carried out. Deputy Morgan has also called for an inquiry into the role of the former regulator and has called for his severance package to be recouped.

Deputy Morgan said:

“The culture borne by this Government has bred this financial crisis. There was a suspension of simple common sense concerning financial institutions. Responsibility was placed with the boards and management of financial institutions for the implementation of appropriate risk management systems and effective internal controls. But where profit was their sole motivation, risk management and caution were thrown to the wind.

“The financial market wrongly became the judge of how regulation was carried out. Incompetent people were placed into important positions and they were rewarded for this incompetence by an incompetent Government. This light-touch regulation is now a burden shackled around each and every person for generations to come.

“The people of this State are paying a heavy price for the failure to regulate adequately. The social costs of the failure to regulate properly are severe- hundreds of thousands of people will not only be in debt but many are at risk of having their homes repossessed. However a financial regulator who played a heavy part in Ireland’s banking crisis was able to receive a €630,000 severance package on his retirement. Rather than being sacked, blacklisted and punished for failing to see beyond the word of the banks, the former regulator was able to retire with a hefty severance package.

“The white collar crime and corruption that engulfed the Irish banking sector needs to be treated as seriously as any other form of crime, and needs to be prosecuted quickly and effectively. There needs to be a serious inquiry into the role of the former Financial Regulator who was disposed to say that the Irish financial system was robust, adequately capitalised and in a position to withstand the turbulence sweeping through the markets just 72 hours before the Government had to move in to save it. If this was the professional opinion of the banking watchdog then it is imperative that the Government and judicial system move to recoup the taxpayers money used for his severance package.” ENDS

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