Banks can't go back to old ways
Published 22/06/2010 | 05:00
'BANKS must change their behaviour and improve governance, risk management and lending practice. A complete rethink on how banks lend and sustain their growth is required."
A plea by some independent economist? A reformist speech at a financial conference? Not at all. These words came yesterday from the heart of the fiscal establishment. They are the words of Jonathan McMahon, assistant director of financial institutions supervision for what is now the Central Bank and Financial Services Authority of Ireland.
And there were franker and sharper words to follow. He questioned whether all the banks "have really gone through a process of actually exploring the weaknesses that became apparent during the crisis", so that "we find ourselves in the process now of having to hold their feet to the fire". That can have left nobody in any doubt as to how the new regime views the institutions it regulates -- significantly, not so much in terms of the boomtime frenzy as of their present attitudes.