Thank God for Lehmans
THERE is nothing to beat a public act of contrition. I have been waiting patiently for the Financial Regulator's confession.
For six long months to be precise, because for some reason the watchdog was incapable of reporting on its antics in 2008 until 2009 was more than half gone.
Even the watchdog's very best friends in the banks beat it to the draw by months when producing their annual reports.
Forgive the Regulator. It had a traumatic year. Cabals of mandarins will have been needed to concoct the annual report. Remember, 2008 was the year when chief executive Pat Neary lost his head.
The chairman, poor Jim Farrell, was the watchdog's frontman last week. It was his job to repent, both in the annual report and on the airwaves.
Jim does not do repentance. Nor do many of the other survivors of the banking crisis, still inhaling the toxic oxygen down in Dublin's Dame Street fortress, home of the watchdog.
Chairman Jim's statement was staggering.
The familiar old bull was rattled out.
In the first line was the word "global".
In the fourth line was the word " international".
In the sixth line was the word "world".
In the eighth line was the word "everywhere".
In the 11th line was the word "internationally".
Well, you get the gist. Jim blamed foreigners.
Before you can turn the first page there they are, all the old villains -- Northern Rock, Bear Stearns, Fannie Mae and Freddie Mac.
Turn the page and the inevitable bogeyman "Lehman Brothers" takes pride of place.
Richard Burrows of Bank of Ireland and Dermot Gleeson of AIB made a better fist of their own acts of contrition. Not Jim, although his attempt to blame outside forces for the woes of the regulator sound familiar. All the bankers have trotted out the same line. So Jim's statement could easily have come from a banker, not a regulator.
And therein lies the problem. Jim the regulator is also Jim the banker.
Jim was the boss of Citibank in Dublin for many, many years.
Which of course has been the flaw with the Regulator all along. It has been far too close to the bankers. The terrible twins have sung the same tune.
In Ireland's case, where the chairman of the Regulator is a career banker himself, you cannot really expect much else.
Not that the Regulator admits that Jim was a career banker. Its silence on the subject is astonishing.
The annual report buries its board. Somewhere, hidden deep in the first 100 pages, you will find the directors.
They are not flagged in the index at the front, as in most annual reports. You simply have to keep turning pages until you dig them up.
I turned the pages in search of a bit about these guys who were supposed to police the banks over the last five years.
Eventually I found them all -- lurking on page 92 -- but the information about them was minimal. It merely gave their names, their date of appointment and whether they were executive or non-executive.
No photographs; no pedigree; no career details; no education; no qualifications . For all I know, Jim may have been an estate agent or something equally disreputable .
These directors are political nominees. No doubt some of them have ability to burn, but taxpayers are entitled to know that they are not secondhand car dealers, estate agents or sheep stealers.
The Regulator is not going to tell you.
So I rang Jim. He was charming and refreshingly up front -- for a banker. He freely volunteered information about himself and any other director. Yes, he was a banker. He was in conciliatory mode: he would take on board the suggestion that there should be fuller information given about directors.
I have heard all that before. Wait until he meets the objections of the secretive czars of Dame Street. Once the press office tries to stop him, he will have problems. Their instincts for secrecy are ingrained.
The watchdog's press office must be a paranoiac's paradise. Every question asked, however innocent, receives an evasive answer. The first time I told them not to contact me any more, they asked me out to lunch. The second time they stamped their feet and complained to the Editor. I hope he replied or else he may have to endure the lunch. No human being deserves to be bored to death.
The Regulator's spinners are, no doubt , still frantically pedalling the line that turmoil around the globe is to blame for Ireland's banking crisis.
Jim had learned his lines about the globe last Tuesday. He was on message with the global stuff.
The only place where the globe and the Regulator really meet is when the Dame Street staff are globe-trotting. And, according to the annual report, they are enthusiasts.
One of the most remarkable items of expenditure is a figure for last year of €795,000 for "business travel".
This year they will top it with €970,000 for " business travel" -- a 22 per cent increase in these tough times. "Business travel" may be one reason why our watchdog has not been doing a lot of watchdogging in recent years. It spends €20,000 a week on globe-trotting.
According to Jim, the travel is mostly in Europe, although the annual report shows a lovely photograph of him signing some terribly important-looking document in China last year.
There is another picture of an absolutely charming Albanian visiting delegation. The Regulator's travel budget would do Fas proud. Unfortunately we cannot find the details behind its overseas jaunts because, unlike Fas, the Financial Regulator is protected from the Freedom of Information Act.
No one should begrudge the staff their trips overseas. They must be exhausted. Exhaustion must be the reason why many employees of the Financial Regulator only do a basic 32-hour week. Their whole sleeping cycle must be thrown out of sync if they have to take an early morning flight.
Quite a contradiction is emerging down in Dame Street. Some settled staff do short hours on full pay, while new recruits are being sought at sky-high wages and slightly longer hours. Some of the watchdog's current crop are working hours which make France's 35-hour week look like a slave labour camp.
Perhaps the present feather-bedded employees might consider putting in a normal 40-hour week? Then the taxpayer might be spared paying the vast salaries of those currently being recruited.
Not a hope. Old habits die hard down in the fortress. Like bonding with bankers; like short hours; like buckets of travel; like blaming foreigners; like never apologising.
A half-apology was forthcoming. "Much of the criticism has been constructive," according to chairman Jim, the banker. He even showed a flash of half-humility. "And our reaction has been to learn from it and to introduce new practices and procedures in response."
Even the faceless directors' separate analysis gives a grudging nod to collective repentance: "In retrospect," they say, "it is clear that the actions we took were insufficient and were not taken early enough."
And then they revert to the oldest chestnut of all: "Lehmans".
God bless Lehmans. What would all the guilty parties have done without good old Lehmans?
They might have made a serious act of contrition.
- Shane Ross
