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Saturday 30 August 2014

Central Bank quiet on finance checks of bank staff

Mark Keenan

Published 05/01/2013 | 05:00

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THE Central Bank has refused to state whether or not it believes that all of Ireland's banks are now in full compliance with tough new probity rules which came into effect last month.

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As we enter 2013, all banks are now obliged to have certified that thousands of staff who deal with customers on a day to day basis adhere to the strict financial health and probity requirements outlined under the Central Bank Reform Act 2010.

A spokesperson for the Central Bank said: "All we can say at this point is that these standards are now required by law and that we will be actively monitoring banks to ensure that they comply with them."

A survey of five leading Irish banks conducted by the Irish Independent this week showed that at least four of them now claimed to be fully compliant with the probity legislation. Strict penalties have been promised for those who have failed to comply.

AIB, Bank of Ireland, Permanent TSB and Danske Bank all confirmed full compliance. A spokesperson for Ulster Bank said that in view of the layoff issues which are ongoing, the bank could not answer this question before this article went to press.

Regulation

Fitness and probity rules have been introduced as part of the tighter regulation of banks. The system is designed to make sure that only qualified, suitable staff are involved in making financial decisions within lenders.

One reason behind the introduction of the legislation was the high exposure of Irish bank staff to property debt and potential financial difficulties, thanks to widespread preferential mortgage and loan treatment during the boom years.

The regulator feared that personal financial issues among staff who deal directly with customers might compromise decision making.

Last year it was revealed that AIB staff alone owe €2.5bn to AIB – of which €2bn relates to property.

When the five banks were asked whether any form of "loan forgiveness" had been applied to any members of staff in order to help them to comply with personal probity and financial health requirements, three of them – AIB, Danske Bank and Permanent TSB – said they had not permitted any form of loan write-offs, debt forgiveness or write downs.

Ulster Bank said it couldn't answer this question at present due to ongoing issues. Bank of Ireland said it would not answer the question.

Irish Independent

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