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Thursday 18 January 2018

Central Bank thrown into turmoil

Senior executive is sixth to quit crucial team of regulators

Fiona Muldoon
Fiona Muldoon
From top left: Peter Oakes, Matthew Elderfield, Jonathan McMahon, James O'Brien, Lars Frisell and Fiona Muldoon

THE Central Bank has been plunged into crisis after it lost a sixth senior regulator hired to shore up the banking system after its multi-billion euro collapse.

Head of banking supervision Fiona Muldoon is to leave the regulator's offices in May, the latest in a series of departures.

Deputy Governor Matthew Elderfield terminated his contract early and now works for Lloyds Banking Group.

Chief economist Lars Frisell, who joined from the Swedish regulatory authority, is set to leave in March to join the IMF.

The bank has also suffered from the departures of Mr Elderfield's deputy Jonathan McMahon, head of compliance Peter Oakes and credit union registrar James O'Brien.

They were all hired to help restore the regulatory regime after the €64bn collapse of the domestic banking system when the property market crashed.


Central Bank governor Patrick Honohan was forced to deny that the departure of so many senior executives pointed to a crisis of confidence in the organisation.

He said: "We have strength in depth here. A lot of people have come in and naturally some will stay longer than others.

"We have made a lot of appointments and I don't like to see people going, but people will move on.

"I am not worried about our capacity to carry out our mandate."

Ms Muldoon, who has the title of director of credit institutions and insurance supervision at the bank, was passed over for the job of financial regulator at the Central Bank.

This position went to Frenchman Cyril Roux who took up the position in recent weeks. Ms Muldoon will leave in May next year.

She hit the headlines last year when she compared top bankers to surly teenagers, for their failure to get on top of the mortgage crisis.

In a straight-talking address to the Irish Banking Federation conference last year, Ms Muldoon warned of a lack of leadership in the sector for its failure to deal with the mortgage arrears crisis.

"A culture of leadership is missing in Irish banking: many of you may dislike me for saying this but, arguably, if it was also missing in the creation of the credit bubble then it is still missing," she told the bankers.


Ms Muldoon said banks wait to be told what to do, they do not like it and then they criticise.

"The relationship between banking and the regulator has too often felt like a parent/child dialogue and you know what, this will not move banking out of its current difficulties," she said.

The bankers were told they have been acting like they are "stuck in stasis but at least hunting with the pack".

Yesterday, she declined to tell reporters of her future plans.

Ms Muldoon said: "I joined the Central Bank of Ireland on my return to Ireland, at a time of great challenge for the financial services industry and for the country. It has been a privilege to work with so many others on the pressing economic and regulatory issues of the day."

Prof Honohan said: "Fiona brought great leadership strengths and practical knowledge of the financial services industry to the role.

"She has been instrumental in many of the initiatives undertaken by the bank to address the role of the regulator, the mortgage and SME arrears issues and the stabilisation of the banking sector."


- Charlie Weston Personal Finance Editor

Irish Independent

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