Central Bank chiefs warned recruitment crisis has raised risk of market 'issues being missed'
Fears over failure to retain and attract talent echo deputy governor's concerns on 'corporate brain drain' affecting regulator's work, writes Simon Rowe
Central Bank chiefs were warned by its outgoing director of markets supervision that an ongoing human resources crisis at the banking regulator "would lead to issues being missed".
Markets regulator Gareth Murphy, who leaves his post next month after handing in his notice in August, told a meeting of the Bank's oversight board that "limitations on the ability to retain and attract the right talent was reducing supervisory capability and that there were increased risks that reduced levels of front line supervisory experience would lead to issues being missed".
His stark warning is revealed in minutes of a Central Bank Commission meeting held on April 28.
The minutes were redacted in an earlier version published by the Bank in June - only weeks before Murphy announced his departure. They have been 'updated' in recent days with a large section reinstated in unredacted form.
Murphy's warning expands on similar concerns raised by the bank's deputy governor, Cyril Roux, who warned last December that a corporate 'brain drain' would hamper the Bank's regulatory ability and "bring further stresses to the bench strength of banking supervision in the Central Bank".
At the April meeting of the Bank's internal oversight body, Murphy said the HR crisis was affecting the Bank at a time of "increased volatility" in the global markets. He warned that "such an environment could lead to a potential increase in conduct risk among market participants".
Murphy, who joined the Central Bank in 2010, left in August to return to the private sector. He previously worked with the Bank of England, US banking giant JP Morgan and the now-defunct hedge fund management firm Long Term Capital Management.
Governor Philip Lane has moved to overhaul markets supervision at the bank. Last month he announced a plan to split the organisation's key markets supervision division into two units.
He plans to replace the current Markets Supervision Directorate with two new directorates - an Asset Management Supervision Directorate (AMSD) and a Securities and Markets Directorate (SMD).
Files released by the Central Bank reveal that despite spending €1.1m on a hiring drive in 2015 "recruitment remained a challenge" for the regulator throughout this year.
Although the Bank has targeted a staffing increase of 20pc, or 300 jobs, over a three-year period - bringing its total headcount to 1,829 - "resourcing remained a key focus and challenge", according to minutes of summer meetings of the Central Bank Commission.
Sunday Indo Business