News

Central Bank silent on probes

The Central Bank said it won’t say whether it will use special powers to investigate any of Ireland’s main banks that survived the crash only with the help of bailouts.

It comes after the Central Bank said yesterday it had settled a case with one of Ireland’s most notorious dead banks — Irish Nationwide — imposing a fine of €5m, which it cannot collect and has therefore waived, on the former building society for “multiple breaches of financial services law and regulation, including persistent failure to comply with its own internal policies and procedures”.

The Central Bank, which only revealed the scale of the probe last week — the first it has brought under a 1942 Act — said yesterday that a parallel probe into a number of unnamed former directors was still ongoing. Irish Nationwide, along with Anglo Irish, was folded into Irish Bank Resolution Corp, which is now in liquidation.

The Central Bank said that it must have evidence of contraventions before launching any inquiry of the scale of the Irish Nationwide probe that took up five years and enormous resources to complete. Similar powers were used to investigate Bloxham, to impose a €2m fine in 2010 on AIB for overcharging, and a fine imposed on Western Union earlier this year, it said.
READ NEXT Government ‘powerless’ to secure Whitegate future

However, a Central Bank spokeswoman refused to comment on the reasons that the 1942 power is not used to investigate surviving banks despite evidence of their slack lending controls during the boom years.

Brendan Burgess, a long-time critic of Irish Nationwide, said that “everyone at the time knew about the questionable practises” at the building society.

“By doing nothing at the time the regulator was equally culpable,” he said.

Central Bank director of enforcement, Derville Rowland, said in a statement that Irish Nationwide “has admitted multiple failings at several levels of its commercial lending process, from operational lending, to credit review, its credit, provisions and audit committees all the way to its board of directors”.

Following increases in 2013, the bank can impose fines on a corporate body of up to €10m, 10% of turnover, and levy up to €1m on individuals. However, the Central Bank sanctions of up to €5m for the corporate, and up to €500,000 for individuals apply in this inquiry because Irish Nationwide was stripped of its banking licence four years ago.

Article Source: http://tinyurl.com/kbwqb42


Back to News >>
^