Bankers acted like pigs at a trough, committee told
The Irish Banking Federation's (IBF) statement of intent on mortgage arrears was yesterday described by TDs as "window dressing" when IBF officials attended a meeting of the Joint Committee on Economic Regulatory Affairs.
The banks were accused of failing to change their culture and of continuing to squeeze businesses by failing to give them credit.
"I don't believe you cared one jot about the regulatory regime in this country over the years because, metaphorically, you were were like pigs in a trough making a potful of money and the regulatory regime didn't exist," claimed Labour's Sean Sherlock. IBF chief executive Pat Farrell admitted the banks had got things "badly wrong" over the economic collapse and admitted that trust in the sector was at its lowest ebb. But he insisted that the culture of short-term profit was changing.
He claimed €35m in credit was available for small and medium enterprises but pointed out that the demand for credit had also significantly reduced.
The banks also backed an overhaul of the debt enforcement system and said there should be a workable alternative to prison for debtors.
Debtor
"No IBF member has placed any debtor in prison for failure to pay their debts in 2008 and 2009. It's a road we don't want to travel," Mr Farrell said.
He said he fully understood the depth of public anger with the banking system for letting them down and, in the process, losing their trust.
"For these failures I unreservedly apologise and regret we let down our customers, our shareholders and our employees. It will take a long time to regain their trust and confidence and we will have to rebuild our reputation brick by brick."
Mr Farrell insisted there was a culture of change in the banks. Senior management had to be accountable and there had been change at board level. But he said there could not be a sudden "clean-out" at board level if the system was to continue functioning.
"You have to be pragmatic but there has been quite a change across the boards. We recognise things have to change and that the emphasis on short-term profit is not a sustainable business model.
"We have to construct the banks in a more simple and straightforward fashion and get back to basics," he said.
- Fergus Black
Irish Independent
