Former AIB director appointed as Finance adviser
A FORMER AIB director who has said that he profoundly regrets not warning of the dangers of a possible collapse in the property market while at AIB has been appointed as a senior economic adviser at the Department of Finance.
Jim O'Leary, who served on AIB's board of directors from 2002 to 2008, is an economist and will join the department as a senior economic adviser in its budget, taxation and economic division. Mr O'Leary, who is currently a lecturer at NUI Maynooth's Department of Economics, Finance and Accounting, previously worked at Davy Stockbrokers.
The Department of Finance said Mr O'Leary was being hired on a fixed-term contract and his appointment was approved by Finance Minister Brian Lenihan. He will report to Ciaran Connolly, secretary-general for public service management and development.
While a member of AIB's board of directors, Mr O'Leary sat on its audit and remuneration committees. He was also a director of AIB's Polish bank, Bank Zachodni, until last year. The bank was forced to sell that division -- considered its jewel in the crown -- for over €3bn last month to Banco Santander to raise much-needed cash.
Mr O'Leary has expressed his regret for failing to warn of the dangers of a possible collapse in the property market while at AIB.
That was a matter of "profound personal regret", he told the MacGill Summer School.
During the property boom, he said, senior bankers believed the economy would achieve a "soft landing", where property values would "plateau or fall modestly" rather than crash. He said at that time the sceptics could have and should have articulated their doubts more consistently.
"Whether this would have made much difference is something we will never know, but it is a matter of profound personal regret to me that I wasn't more forceful in setting out the contrarian view and didn't work harder at analysing its implications."
AIB is now struggling to raise €7.4bn, having transferred €6bn worth of bad loans to the National Asset Management Agency for just €3.2bn. It must raise that cash before the end of this year to meet the requirements set out by Financial Regulator Matthew Elderfield. If it fails to raise that much money, the Government will be forced to step in and take a majority stake in the distressed bank.
Mr O'Leary has also served as a director of the National Statistics Board, Aer Lingus and a member of the Public Service Benchmarking Body between 2000 and 2002.
The Department of Finance also announced the appointment of Tim Duggan as assistant secretary for its Centre for Management and Organisation Development.