Regulation was unbalanced, inquiry is told
Published 04/09/2015 | 02:30
Financial regulation in Ireland was "unbalanced with a substantial and quite intrusive, self-confident consumer focus", the Banking Inquiry was told.
Former Group Chief Executive of Irish Life and Permanent plc, David Went (pictured above), said this "misallocation of resources" led to an inability to analyse in a meaningful way the substantial flow of information from the bank.
"In general it is my view that the Regulator failed to fulfil its prudential function," he added.
The crisis was due primarily to a failure on the part of management and boards of banks, but he added: "I am sure that different decisions at different times by the Regulator could have reduced the severity of events."
Mr Went said his personal contact with the Regulator was "mainly restricted to twice yearly visits".
He told the inquiry that the regulator "appeared reluctant to use its power of moral suasion" preferring to take a "very legalistic view of its power".
Mr Went conceded that while IL&P appeared to be well funded at the end of 2006, events subsequently proved its funding model "absolutely inadequate".
When he retired from the bank in May 2007 he had believed it to be "soundly financed".
David Gantly, former Head of Group Treasury, Irish Life and Permanent /Permanent TSB told the Committee he believed that his company's funding strategy "was balanced and robust".
"Conventional wisdom had it that a liquidity event would be short lived and this thinking proved to be incorrect when faced with an enormous systemic shock," he said.
The final cliff, he added, was the collapse of Lehman Brothers in September 2008 which was "the straw that broke the camel's back".