Business Irish

Sunday 22 July 2018

No INBS losses if State had acted earlier - Fingleton

Michael Fingleton
Michael Fingleton

Gretchen Friemann

Irish Nationwide Building Society might have escaped a bailout if the Government had extended a deposit guarantee scheme to €100,000 sooner, its former managing director Michael Fingleton has claimed.

The 80-year-old spoke under cross-examination for the third day at the Central Bank's ongoing inquiry into alleged regulatory breaches at INBS.

He also blamed an erroneous news report in September 2008 for dealing a hammer blow to the now defunct organisation's liquidity buffers. "We lost €1bn on it," he said.

Mr Fingleton claimed detailed governance matters at INBS did not receive his full attention during the period as there were "other priorities", and said he was unable to recollect that the society falsely assured regulators in 2008 that its credit committee was adhering to its own rules.

Brian O'Moore SC a member of the legal team assisting the inquiry, asked whether Mr Fingleton was "simply oblivious" to the details because he was "trying to firefight the greater crisis in the society".

"Is that your evidence?"

Mr O'Moore noted Mr Fingleton's claims he told INBS's board in January 2008 that the credit committee need only concern itself with assessing loan applications. By the end of that year the board again met to approve a "further set of terms of reference" for the committee. That was the "fourth" attempt since 2003, to strengthen the risk and governance structures on the back of repeated recommendations from regulators, auditors KPMG and advisers Deloitte.

Mr Fingleton said he was "very clear in his own mind' that he had informed the board that the committee was "not dealing" with those matters, which included reviewing loans deemed non-performing or in arrears as well as assessing credit reviews.

Stan Purcell the former INBS finance director, who is also one of the four former senior managers subject to the inquiry, has said he cannot recollect that policy change.

INBS was nationalised in 2010 at a cost of €5.4bn to taxpayers. Mr Fingleton insisted it was the only institution in 2008 "that reduced its exposure on its mortgage book" while everyone else "was lending away willy-nilly".

He said a Government move in September 2008 to lift a deposit guarantee scheme from €20,000 to €100,000 came "too late".

INBS would not "have lost any money" if the change had been made earlier in the year, he said.

Irish Independent

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