Thursday 13 December 2018

Central Bank's own board mauls management on tracker 'failings'

Executives at regulatory body told they have been too slow to devote resources to scandal

Philip Lane says the Central Bank is addressing the issues. Picture: Collins
Philip Lane says the Central Bank is addressing the issues. Picture: Collins
Charlie Weston

Charlie Weston

Management at the Central Bank has been heavily criticised by its own board over the handling of the tracker mortgage scandal.

Minutes for the November meeting of the Central Bank Commission, or its board, show executives came under fire for being slow to devote resources to the tracker probe.

Senior regulators were also told that the Central Bank's communications strategy on the matter was "flawed".

Governor Philip Lane was forced to admit that a "wave of publicity" around the tracker issue had reflected negatively on the reputation of the Central Bank.

This was especially the case after an appearance before the Oireachtas Finance Committee by Prof Lane, director general for financial conduct Derville Rowland, and deputy governor Ed Sibley.

The Central Bank executives were taken to task by the Oireachtas Committee members for being slow to deal with the tracker scandal, with politicians claiming they were reluctant to take on the banks.

TDs claimed regulators did not have a firm handle on the tracker rip-off, almost two years after the Central Bank had begun an industry-wide examination.

The latest figures show banks admitting to an additional 13,600 tracker cases since September. Some 33,700 cases of borrowers being wrongly denied low-cost tracker rates or put on the incorrect margin have now been acknowledged by banks, with the figure set to rise further.

Lenders have admitted that at least 37 borrowers lost their homes as a result of the controversy, while 79 buy-to-let properties were taken.

Now the Central Bank's top executives have been forced to defend themselves before their own board.

The minutes of the commission meeting show that Prof Lane insisted the Central Bank was working hard "to ensure the matter was pursued and that impacted customers received redress and compensation".

But commission members hit back that resources devoted to the Central Bank tracker probe only increased recently.

The minutes state: "In the discussion that followed, members noted the level of resources devoted to the examination had increased only in very recent times, and emphasised the importance now to fully identify the extent of the issue and ensure it was addressed in as thorough and timely a fashion as possible."

An outline of the Central Bank's communications strategy was given to the commission members by Ms Rowland and head of communications Jill Forde.

But commission members said the communications strategy was flawed, and wondered if a different one should have been deployed.

Members said there should be a focus on "local as well as national media and on clarity of messaging".

Ms Forde said a regional communications programme was under way and said the Bank had an evolving social media presence. Ms Rowland agreed that "all of the points around communications were valid and that there was a stronger focus now being put on that".

Asked for a comment, a Central Bank spokesperson defended its handling of the tracker probe.

"The Central Bank has committed to assigning staff to the tracker mortgage examination as required.

"In addition to staff working directly on the examination, many more staff in the Central Bank are working on this project as part of their role, including legal, supervisory and financial conduct staff, and senior management up to and including the governor," it said.

Irish Independent

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