Bank chief hits back at critics of €100m loans
Monday October 29 2007
THE head of the Irish Bankers' Federation has denied that the banks are to blame for lending €100m to two debt-ridden solicitors.
Pat Farrell said the banks were not "stupid" in their dealings with Thomas Byrne or Michael Lynn and that it was wrong to say the incidents were purely the financial institutions' fault.
He was also highly critical of attempts to shift blame on the banks for the debacle.
Mr Farrell was speaking following a grim week for top banks who are owed millions of euro by the two Dublin-based solicitors at the centre of several High Court actions.
"It's almost like trying to blame road deaths on car manufacturers. At the end of the day, it is down to the individual drivers and behaviour. In this case, it's down to the individual members of the Law Society.
"I mean, the whole legal system relies fundamentally on trust. These undertakings are the pivot on which the whole legal system operates. So if banks have been naive then everybody who deals with the legal firms are naive."
He did concede that the banks had to learn the lesson that accepting undertakings from solicitors acting on their own account was something that could not be tolerated in future.
"I think the practice should be changed."
He said the federation had been pushing for years to reform the conveyancing system and to put it on an electronic basis.
- Anne Marie-Walsh
