BoI warns Regulator over new banking rule
Lawyers for Bank of Ireland have warned the Central Bank that it may challenge the Central Bank Reform Act 2010, which sets out a new "Fit and Proper" regime for senior bankers.
The partially State-owned bank is understood to have said that there could be legal issues in the Central Bank attempting to remove any of its employees, including section 34 of the Constitution, which states that "justice shall be administered in courts".
The move comes as the Central Bank begins close engagement with about five senior employees in Ireland's six state-guaranteed institutions, including Richie Boucher, Bank of Ireland CEO.
Mr Boucher joined the Bank of Ireland as head of corporate banking where he served from 2003 until the start of 2006 when its property finance group ramped up lending to developers.
Then in 2005, Mr Boucher announced plans to double corporate banking lending including lending billions to big-hitter builders and property investors.
Mr Boucher then moved on to the board of the bank and was made a member of Bank of Ireland's 10-man risk committee charged with protecting the bank from the excessive lending that has forced the bank to accept a €3.5bn taxpayer bailout.
Just seven developer clients of the property finance group were loaned €1bn during the Irish property boom, costing the bank €700m when their loans were transferred to Nama.
A €200m loan to Sean Dunne, for example, cost the bank €120m while a €180m loan to Paddy Shovlin cost it €130m.
Last week Mr Boucher said: "Clearly, you regret mistakes and misjudgements you have made in the past. I have never shied away from that fact. What I have to do is focus on the job I have today and the goals that we have for the bank."
He declined to comment on his personal interactions with the Central Bank.
"The fitness and probity process, where it arises, is a confidential process and so I am not in a position to respond to your questions," a spokesman for the bank said.
Sunday Indo Business