News Irish News

Friday 20 January 2017

Regulator and Central Bank failed in duties, says report

Emmet Oliver, Laura Noonan and Fionnan Sheahan

Published 19/04/2011 | 05:00

A REPORT on the banking crisis will today blame the Central Bank and the Financial Regulator for failing to rein in lenders during the property boom.

  • Go To

Government sources said the author, former IMF economist Peter Nyberg, concludes that the "regulators should have capped the amount of property lending at the banks".

Sources said Mr Nyberg, a Finnish banking expert, also finds regulators should have forced developers to disclose all their borrowings across the different banks.

The report also singles out UK lenders in the Irish market for introducing 100pc mortgage products into the residential housing market.

The report claims this forced more traditional Irish lenders to follow suit, lowering credit standards across the economy.

Mr Nyberg, however, points out that nobody predicted Anglo would ultimately collapse and the bank was lauded before the crisis by shareholders, credit ratings agencies and those who buy bank bonds.

Former Anglo Irish chairman Sean FitzPatrick was among a group of ex-bankers who gave evidence to Mr Nyberg. But no executives will be named in the report.

Sources last night confirmed the report would go to Cabinet today and could be released as early as this afternoon.

Mr Nyberg is expected to answer questions on the report as is Finance Minister Michael Noonan, while the main banks are likely to issue statements.

The Irish Independent understands that the 160-page report also devotes considerable attention to the banks' external auditors, dubbed "the silent ones", and regulatory authorities, dubbed "the enablers".

Detailed findings are also made in relation to the controls and practices at individual banks, but individual executives are not named or explicitly criticised.

Shame

Last summer, former Finance Minister Brian Lenihan memorably vowed that the report would 'name and shame' those responsible for bringing Ireland's banks to the brink.

"It's so far away from what was promised, this was supposed to be the Irish equivalent of a US public inquiry, instead they've bent over backwards so as not to name and shame anyone," a top banker said.

The report will reveal that many borrowers were borrowing from several different lenders at the same time, but the banks often didn't know the total exposure of the borrowers.

The draft report claims Ireland was caught up in speculative property mania that led bank managements to make poor lending decisions and over leverage their balance sheets.

Irish Independent

Read More

Promoted articles

Editor's Choice

Also in Irish News