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€630,000 golden handshake for the bungling banks watchdog Pat Neary

As the Irish financial crisis continues to worsen there are times when it feels like we are all living in a madhouse.

Pat (never Paddy) Neary, the Financial Regulator, was forced to retire at the end of last month and got a massive €630,00 pay-off to go quietly.

It had transpired that his office had known about the secret directors loans of up to €129m to ex-Anglo Irish Bank chairman Sean FitzPatrick for at least 11 months.

Yes folks, instead of being drummed out of the public service for failing to do the job he'd been given and presiding over the worst banking crisis in Irish financial history, Neary gets a massive golden handshake.

Just to rub salt into the taxpayers' wounds, Neary will also receive a bullet-proof public service pension of almost €143,000 a year, €2,750 per week, for the rest of his life.

Yes folks, at a time when the value of many private sector pensions has been decimated by the collapse in Irish bank share prices, which was caused at least partially by Neary's failure to do his job properly, the same gentleman rides off into the sunset with his saddlebags stuffed with cash and a pension equal to almost five times the average industrial wage.


For the tens of thousands of pensioners who can only look forward to a postponed retirement and a poverty-stricken old age, this was the final insult.

News of Neary's excessive pension and pay-off package came on the same day that even further evidence emerged of the completely inadequate nature of Irish bank regulation.

Ever since we learned of FitzPatrick's secret loans from Anglo Irish last December there have been rumours that further murky matters would eventually come to light. Yesterday the rumours, as has so often proved to be case during the banking crisis, proved to be true.

On September 30 last, just before the Government unconditionally guaranteed their deposits, the banks were bleeding to death as depositors pulled their deposits. Unless the Government had stepped in there would have been a "run" on one or more of the Irish banks.

On that day most of the rumours centred on Anglo Irish Bank, which the Government was eventually forced to nationalise last month.

Completely co-incidentally, September 30 was also the last day of Anglo Irish's financial results. Just before that date on previous years FitzPatrick would temporarily move his loans to the Irish Nationwide so that he wouldn't have to declare them to either the Financial Regulator or his shareholders.

Now it transpires that there was even more financial window-dressing at Anglo. No doubt purely by coincidence, Irish Life & Permanent deposited €4bn with Anglo on September 30 and withdrew it again 10 days later.

IL&P has said in a statement that it was merely "providing appropriate support" to Anglo and that the deposit was reported to the Financial Regulator. Maybe, but it also artificially boosted the deposits which Anglo was able to report when it published its year-end results.

And it wasn't as if the Permo was flush with deposits. At the end of June last it had customer deposits of just €14.4bn. In other words, the money which it deposited with Anglo, a bank widely rumoured at the time to be going bust, represented well over a quarter of all of IL&P's customer deposits.

Maybe there is a perfectly innocent explanation for this apparently inexplicable financial transaction. If there is then it is vital that that the truth is unearthed before any remaining confidence in the Irish banking system evaporates.