Central Bank to rule on directors at end of year
Regulator will focus on 'small handful' of directors who want to remain in office
A "SMALL handful" of bank bosses who survived the financial crisis and want to stay in their jobs will have to wait until December to find out if they'll be subject to a Central Bank investigation into their roles in their institutions' demise.
The news comes more than two months after the Central Bank's head of enforcement Peter Oakes wrote to about 40 directors who'd been in place before the 2008 bank guarantee scheme and asked if they planned to remain.
The Irish Independent has learned that a "small handful" -- believed to include Irish Life & Permanent boss Kevin Murphy, EBS chief Fergus Murphy and Bank of Ireland's Richie Boucher -- have indicated that they plan to remain in office.
The Central Bank will spend the coming months weighing the particular situations of all the directors involved and carrying out further research, though there are no plans for any interviews with the individuals.
A decision on whether to proceed with an inquiry into any of the cases will be announced on December 1, when the Central Bank's new enforcement powers come into effect.
Details of the inquiries are unlikely to be publicly announced, as such a move could be deemed "prejudicial" against the individuals involved, but the Central Bank may announce how many inquiries are being mounted.
The probes are expected to be completed sometime next spring; the Central Bank's new powers will give them the ability to immediately suspend anyone who doesn't meet the competency and track record standards of the new "fitness and probity" regime brought in to up the corporate governance standards at the banks.
The situation is expected to be most closely watched at Bank of Ireland, where strategic investors who saved the bank from nationalisation have strongly endorsed Mr Boucher's tenure.
Earlier in the year, Finance Minister Michael Noonan had indicated all pre-crisis directors should go, even if they weren't "personally culpable for what happened in the banks".
It is understood that he has reassured the new BoI investors that the Government won't attempt to remove Mr Boucher. However, he has stressed that the Central Bank's process is entirely independent.
Mr Boucher has made clear his intention to stay in office, as have the chiefs of both EBS and Irish Life & Permanent.
Central Bank deputy governor Matthew Elderfield has described the review of incumbent bank directors as an investigation of "their competence and track record in the period leading up to the financial crisis".
This will then be measured against the Central Bank's new fitness and probity regime, which will come into force, on a phased basis, from December 1.
"Where they fall short of the required standards, we will not just remove individuals, but we will also, where appropriate, issue notices to prohibit individuals from continuing as directors," he told an audience at Trinity College on March 22.
"I don't underestimate the legal challenges that we might have in using our new powers, but we must be prepared to make difficult judgments on fitness and probity and it is right that we should start with this group."