Saturday 18 November 2017

Board of Financial Regulator pocketed €865k in fees

Judge Nolan: No red lights.
Judge Nolan: No red lights.
Nick Webb

Nick Webb

Part-time board members of the hapless Financial Regulatory Authority were paid more than €865,000 in the five years from its establishment in 2003 until the near collapse of the Irish banking system at the end of 2008.

The Financial Regulator, which was tasked with keeping the banking sector from destroying itself, failed spectacularly, leading to the €64bn taxpayer-funded bail-out of the banking sector.

The Financial Regulator was carpeted by Judge Martin Nolan during the Anglo Irish bank trial over loans to the Maple 10.

Judge Nolan said it seemed "incredible" that "red lights didn't go off somewhere in the regulator's office," in relation to the Maple 10 share scheme.

Central Bank governor Patrick Honohan added that the regulator's role in the illegal share-buying scheme devised in 2008 to unwind Sean Quinn's stake in Anglo Irish Bank was a "sorry story".

While the incompetent Patrick Neary was the chief executive of the financial regulator from 2006 onwards, he was backed up by a board drawn from industry and other areas.

Former 'Irish Times' and Vodafone chairman Brian Patterson – who had also headed up Wedgwood – was the original chairman of the financial regulator, serving from 2003 until he left in mid-2008 to be replaced by banker Jim Farrell.

Other long-serving board members of the Financial Regulatory Authority from its foundation to the eruption of the banking crisis included senior counsel Gerry Danaher, novelist Deirdre Purcell, former Standard Life Ireland boss Alan Ashe, economist Alan Gray and the former IBEC chief and IDA chairman John Dunne.

In the year to December 2008, the authority board members earned €128,334, an increase on the €122,500 paid a year earlier.

Some €172,083 was paid out in fees in 2006, the year that lending by Irish banks for property investment reached record levels. Fees of €146,185 were paid in 2005 and 2004, with a further €150,417 in the first year of operation in 2003, according to Central Bank documents.

The Financial Regulatory Authority was scrapped as an independent organisation and subsumed back into the Central Bank following the banking crisis.

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