AIB hires Promontory for governance advice
Published 10/11/2010 | 05:00
AIB has hired Promontory Group, the global financial services consultancy group, to advise it on risk and governance issues. It is the third time in eight years that Promontory has advised AIB on risk-related issues.
AIB and Bank of Ireland earlier this year bowed to demands from the Central Bank to appoint risk and governance advisers. AIB appointed the Promontory Group to carry out the review while Bank of Ireland appointed the Boston Consulting Group.
The Promontory Group is headed by Eugene Ludwig, a former banker and a former Comptroller of the Currency of the United States. Ludwig, in 2002, reported to AIB's board on the John Rusnak rogue trader affair. The report cost AIB $8m. At the time Ludwig recommended that AIB should conduct a comprehensive review of all risk management and audit functions. Ludwig was also hired by AIB in the wake of the overcharging allegations that came to light in 2004.
AIB said at the time that it had appointed Ludwig to advise on the adequacy and appropriateness of all actions to be taken by AIB in relation to all relevant control, risk, compliance and governance issues arising from recent events.
AIB admitted to further overcharging earlier this year. AIB declined to comment when asked whether the Promontory Group had been appointed again. However, bank sources indicated that Promontory Group had been appointed again, though Ludwig personally had not been in AIB headquarters.
The regulator is believed to have insisted on the appointment of consultants as it was concerned that the corporate governance and risk culture at the banks was not changing quickly enough for its liking, particularly at AIB.