Wednesday 23 January 2019

Change in the banking culture is long overdue

Finance Minister Paschal Donohoe. Photo: True Media
Finance Minister Paschal Donohoe. Photo: True Media
Editorial

Editorial

King Canute had an easy time of it in his beating back of the waves compared with the progress made by successive finance ministers in dealing with our banks.

Their litany of failures runs from the egregious to the catastrophic, and yet very little has changed in the consumer interest. All of this begs the question: so what did we get for their €60bn bailout? A slap in the face is what it feels like. For they brazenly went on to hold on to hundreds of millions that did not belong to them in compensation and repayments in the tracker scandal, and until now nothing was done about it.

After all the promises of reform and professions of remorse, Fianna Fáil's finance spokesman Michael McGrath said yesterday he did not have confidence that the current investigation into the mortgage controversy will bring about change.

He also said that the last two governments were "deferential" to the banks. This was perhaps a little rich given the billions his own party poured in to save them; a debt that the Irish people will carry for generations. But Mr McGrath is right to say that only individual accountability for banks and bankers will make any difference.

There is a saying that when politicians and the country become the servant of the money, and not the other way around, then the politicians have failed. There is little question that the politicians have failed to whip the bankers back into line since the crash. But these failures are as nothing to those of the bankers and the pernicious culture that they presided over.

A bank by definition is after all a financial institution licensed to receive deposits, and make loans. The key word here is licensed; the licence is given by the Central Bank. It appears that the banks were given freedom to create golden eggs, and when they got too greedy were not reined in.

Clearly, the conflict of interest for the Central Bank in monitoring the banks and protecting the consumer is too great. It is time to separate these functions and for the consumers to have their own guardian. Our Government, as a major shareholder in some banks, also has responsibility.

The tracker injustice is only part of the story. Irish people have been fleeced for too long, paying the highest interest rates in Europe without intervention.

Finance Minister Paschal Donohoe is hoping to draw a line in the sand. But lines in the sand did little for King Canute, and turning the tide takes more than talk.

Adams needs to stop the political shadow boxing

Sinn Féin leader Gerry Adams has looked more than a little ring rusty in his 'rope a dope' tactics in attempting to land a political punch in the Dáil.

He rounded on Taoiseach Leo Varadkar and criticised the British government yesterday for "indulging" what he called "stubborn elements within political unionism", which he blamed for the deadlock on agreement in the North.

But Mr Varadkar hit back, accusing Mr Adams of "setting the scene to ensure somebody else gets the blame for the failure to come to an agreement in Northern Ireland".

He said he sounded like somebody who had already given up. The exchanges took place even as senior figures in the DUP and Sinn Féin confirmed there was no progress in talks that have left the North without a government since January. The British government will move to introduce a budget early next month. Mr Adams would do well to conserve his energies and concentrate on doing something constructive instead of engaging in shadow boxing.

Irish Independent

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