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Regulator must act decisively now - Morgan

6 October, 2010

Speaking after the meeting of the Oireachtas Committee on Economic Regulatory Affairs with the Financial Regulator Matthew Elderfield, Sinn Féin Spokesperson on Finance Arthur Morgan criticised the influence that the ‘old establishment’ are having on the regulators office when banking practices are being supervised by many of the same banking figures that caused the crisis in the first place. Deputy Morgan also criticised the lack of action being taken in respect of auditors and convictions against any corrupt bankers.

Deputy Morgan said:

“I feel that the Office of the Regulator is coming under pressure from the old establishment that runs this town and their golden circle who benefit from it.

“I had shared in the hope that the Office of the Regulator would be in a position to do their work independently and effectively and I said so when Matthew Elderfield first visited this Committee several months ago.

“Unfortunately I am developing some doubts and concerns that the old clique may be exercising some influence on the office. Indeed, the banking practices introduced by the regulator since the financial collapse in 2008 are being supervised by many of the same banking figures that caused it in the first place. I say this because at least six of AIB’s board members are the same individuals that were in place and whose policies led directly to the banking crisis and the crash of the Irish economy.

“Matthew Elderfield said that he would not sanction people for appointment as board members to a bank where they had a criminal record. But we all know that the people who ran the banks should have a criminal record by now. Not one of these bankers has been hauled before the courts and most of us have no expectation of court appearances and convictions against any of these corrupt bankers.

“I am also concerned that the Office of the Regulator is adopting a softly-softly approach in relation to the auditors of the banks. Some of the auditors ought to have and should have known of the scams that were going on within banks. However instead of exposing the corruption the auditors simply overlooked it. Currently these auditors are self-regulating and there is no accountability in respect of their actions. This is completely unacceptable.

“I acknowledge that the Office of the Regulator is still grossly understaffed and that the regulator has only been in the position for nine months, but we expect more action to be taken at this stage.

“Banks should be cleaned up. But this cannot come without a credible mode of enforcement. Going forward, financial regulation cannot be expected to reform the financial sector or change the culture of banking when at the core of the new system is the skeleton and the vices of the old one.” ENDS

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