I'm sorry, says ex-regulator on pension of €114,000
Neary points finger of blame at banks and government despite being 'deeply sorry'
Former financial regulator Patrick Neary has said he is "deeply sorry" for the banking crisis - but pointed the finger of blame at the banks and government of the day.
Mr Neary - who received a €630,000 pay-off in 2009 and has an annual pension of €114,000 - said that "primary responsibility [for regulation] resided with the banks themselves".
They were "best placed of all to assess their own risks and business models, to strike the right balance between their risk and reward and have skilled, responsible people in place".
Asked if he should have done more to stop banks lending too much money to property developers, Mr Neary said: "I would never see it as the job of the regulator to dictate who banks could lend money to."
He added: "The introduction of a tougher supervisory regime would have conflicted with government policy to promote its attractiveness as an international financial services location."
Mr Neary's appearance was the most highly-anticipated since the Banking Inquiry began, as he has never explained his role in the economic collapse - despite collecting a handsome pension from the public purse. He said his salary and pension were in line with civil service guidelines at the time.
On whether the payment he received on leaving the job was appropriate, Mr Neary said it was the authority "agreed" to pay him.
"I don't have any more to say on the matter," he said.
During his evidence he repeatedly argued that the Financial Regulator was not a single individual but an Authority.
He insisted that the Authority did not have the mix of skills necessary for a more intrusive style of supervision. They had too few staff and they were stretched to the limit.
The Authority, he said, was obliged to follow Central Bank forecasts that "predicted a soft landing".
"If that prediction had been fulfilled, there would not have been a banking crisis."
He argued the Central Bank analysis of the situation was "overly benign".
On the night of the Bank Guarantee, Mr Neary said he and the Chairman of the Authority advised the first meeting at Government Buildings that on the basis of their information that all banks were in a position to meet their obligations.
Liquidity, however, "was becoming a critical issue for them, especially Anglo".
The Guarantee, he added was viewed positively by market commentators and seen to address satisfactorily the concerns of depositors.
Sinn Féin Deputy Pearse Doherty questioned Mr Neary about the concentration of loans where 20 customers of Anglo Irish Bank and 25 at Irish Nationwide Bank had half of all loans and why he had not intervened.
Mr Neary repeated that he "could not conceive of a situation that the regulator would intervene in a contract between a bank and a client".
Asked about "cosy" relationships with bankers, why the Regulator should trust bankers and if he was out of his depth, Mr Neary said: "The reality of it is the system failed. I have to recognise and accept that."
Mr Neary also told the Inquiry that Anglo CEO David Drumm had sought an "informal" meeting with him in September 2007 to discuss businessman Sean Quinn's financial position and Contracts for Difference.
The former financial regulator said that he had made some inquiries with colleagues but there was "nothing other than rumours" until the facts were established in March 2008.
He agreed he had met Mr Quinn in January of 2008 and raised the issue. Mr Quinn said he had "a small CFD position" and Mr Neary "took that to mean" the CFDs had been converted to shares.