independent

Thursday 17 April 2014

Ex-Central Bank advisor lashes new regulations

Global bank firms 'could exit Ireland'

A former senior Central Bank figure has criticised the Financial Regulator for paralysing financial institutions with blanket regulation.

Michael Bourke was brought into the Central Bank as a top-level risk adviser in mid-2010. He didn't stay long.

"I didn't see a role for myself there. I wouldn't be a huge fan of the way the regulatory stuff has gone. There are unchecked issues that we will suffer for in the next few years," he said.

"I got on well with Matthew Elderfield, but felt I couldn't give value with my views. I became frustrated with the banking situation. "

Highly experienced, ex- IMF adviser Mr Bourke ran Dermot Desmond's Latvian Rietumu Bank, with assets of close to €1bn, for almost a decade and has worked in banking and finance for almost 40 years.

"You have banks sitting there, perfectly liquid, sitting pretty but doing nothing, not lending, not being allowed to lend. The whole thing stagnates.

"If you raise your head above the parapet about these things, you'll be shot down for supporting rich bankers. But we need our banks to work. Regulation is going too far and being too uniform," he concluded.

Mr Bourke is a leading player at Latvian 'bad bank' Reverta and is critical also of the "hugely costly" structures of Nama and the IBRC.

"I run the Latvia set-up within a strict budget," he said. "There are no bonuses and very basic salaries. There are set performance targets. It's all new blood. Our budget is a fraction of what you have back in Ireland. There are no perks, no cars. Everything is tendered and kept as cheap as we can get it. We get rid of lawyers as quickly as we can. We're working for the taxpayer and conscious of that."

Mr Bourke warned that the many international banks based at Dublin's IFSC could exit Ireland due to "one size fits all" banking regulation that "tars all banks with the same brush".

"High-class organisations – Citi, Wells Fargo, Canadian Banks – all came to Dublin and provided high-paid Irish jobs. We've been lucky to attract them – but they could take those jobs to Singapore in the morning," he said.

"They will be asking, 'is it worth it?', due to this pressure from the regulator.

"The regulator has to be reasonable and not treat them like bad banks. Don't paint all banks with one brush just because AIB got into trouble."

"The big mantra from the regulator is 'things must be challenged' but equally the regulator must be challenged," he continued.

At Reverta, Mr Bourke is pursuing two Russian oligarchs for a €60m debt.

"It's been a chase through courts across Russia, fighting attempts to keep assets out of reach," he said.

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