Tuesday 23 January 2018

Lenihan was 'very cross'

Brian Lenihan
Brian Lenihan

Central Bank Governor Patrick Honohan defended his controversial call to RTE's 'Morning Ireland' programme to announce the bank bailout.

In an unprecedented move, the Governor rang the radio programme on the morning of November 18, 2010, from Frankfurt where he was attending the European Central Bank's governing council meeting.

"The start of negotiations provided a basis for convincing reassurance, which was clearly needed, and I gave a radio interview to that effect," he said.

Mr Honohan had learned the previous day there were discussions at a meeting of the Euro group of finance ministers. The Governor said he phoned Mr Lenihan telling him they wanted him to make the announcement.

The Minister was "very cross" and said he could not do so without a government decision.

Mr Honohan said he finished the phone call "with my tail between my legs" but worried he was not doing enough.

He said he had not consulted either the Minister or the Taoiseach beforehand. He felt time was of the essence.

It might have been a courtesy to inform the Secretary General of the Department but "it didn't occur to me in my excitement to get the message across".

Bankers face fines, not jail

Senior bankers are unlikely to be jailed, but banks could be fined, Central Bank Governor Prof Patrick Honohan has said.

Asked if the legislation was there to jail bank CEO's, Prof Honohan said: "The answer is yes, subject to going to the High Court."

The legislation was "not perfect" but "we have enough".

"So you could remove them overnight," said Deputy Kieran O'Donnell. "Ah yeh, probably."

Prof Honohan insisted, however, that the Central Bank was more likely to impose fines.

"Will we fine them? We might, but we have to be graduated in this. Are we going to send someone to jail for violations? No. We might proceed to go through a sanctions procedure and fine them so we are leaving that open."

Mr Honohan said the Central Bank would not be publishing the names of seven institutions who had breached the Code of Conduct on Mortgage Arrears, introduced in 2009.

Pressed as to why, he said "because if we do that, we are not going to have any chance of getting fines. "We are not trying to protect anyone here. We are trying to protect our ability to continue to engage and, if necessary, impose fines."

Irish Independent

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