Sunday 18 March 2018

Ex-regulator Con Horan will go back to work at Central Bank

Con Horan
Con Horan
Patrick Honohan, right, governor of the Central Bank, and deputy governor Stefan Gerlach, at the launch of the bank’s Annual Report 2013. Tom Burke

Donal O'Donovan and John Downing

FORMER regulator Con Horan is due to return to work at the Central Bank at the end of the year – but the bank will not say what job he will come back to.

The role played by the Office of the Financial Regulator in an illegal loan scheme involving Anglo Irish Bank in 2008 was described as a "sorry story" by current Central Bank Governor Patrick Honohan yesterday, as he insisted it could not happen again now.

Mr Honohan was reacting to comments from Judge Martin Nolan, that the two former Anglo Irish Bank directors found guilty under Section 60 of the Companies Act had been "led" into "error and illegality" by the state agency.

Along with his then-boss Pat Neary, Mr Horan was part of the senior management at the Office of the Financial Regulator – part of the Central Bank – when the former Anglo directors William McAteer (63) and Pat Whelan (52) allowed their bank to make illegal loans to the Maple 10 group of investors.

The two former Anglo executives were found guilty of the offence under Section 60 of the Companies Act last month. Mr Horan gave evidence during the trial.

Speaking at the announcement of the Central Bank's annual report, Mr Honohan said that the the judge's comments were not a surprise.

"The deficiencies that were mentioned very much resonate with what we have already laid out four years ago in (a report in) May 2010," he said.

"I am sure that we would not see such regulatory failures today," he added.

In 2008, senior official Mr Horan was the Prudential Director of the Irish Financial Services Regulatory Authority, with hands-on responsibility for supervising lenders, including Anglo.

Mr Horan was appointed as a special adviser to Matthew Elderfield, who replaced Patrick Neary in 2009 as Financial Regulator.

Since 2011 he has been on secondment from the Central Bank here to the European Banking Authority in London. The London placement is due to finish at the end of 2014, Mr Honohan said yesterday.

Asked what job Mr Horan will take up on his return, Mr Honohan said: "I haven't any comment on that."

Labour TD Arthur Spring last night insisted that Mr Horan must be "carefully assessed" to see what role, if any, he can have on his return.

Mr Spring said the number-two at the Regulator's office in 2008 when the banking system collapsed would be coming back to a vastly changed set-up and careful consideration had to be given to his role.

Mr Honohan meanwhile refused to say yesterday whether any official who was in a position of responsibility at the Financial Regulator prior to the crash has been disciplined.


He also declined to comment on whether a share of pensions or lump sums paid to former staff who have left the Central Bank should be clawed back.

Later, at an appearance in front of the Oireachtas Finance Committee, Mr Honohan said no new investigation is needed inside the Central Bank into the events preceding the banking crash – despite Judge Nolan's comments. All information arising out of its earlier reviews has been passed to the gardai, the governor said.

In its annual report published yesterday, the Central Bank said an investigation into historical lending practices at the former Irish Nationwide Building Society, which was nationalised in 2009, is now at an "advanced stage."

Decisions on potential enforcement proceedings will be made once that probe is completed. An investigation into financial irregularities at Bloxham Stockbrokers, which closed last year, is also ongoing.

Elsewhere, Fianna Fail leader Micheal Martin was forced to distance himself from former Financial Regulator Mr Neary and insisted that he had nothing to do with his appointment.

He came under rigorous questioning from the media over whether or not his party would be damaged in the elections by the developments surrounding the Anglo trial this week.

Irish Independent

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