Well let me tell you that it is extremely effective.
36,000 or so borrowers who got material tracker redress - without the Central Bank it would have been about 3,000.
We would not be where we are today without the moral suasion of the Central Bank. AIB point blank refused to do anything for this cohort until the CB persuaded them to admit to a service failure and open up the opportunity of going to the courts or the Ombudsman.
Every one of the management team and the non-executive directors are subject to approval by the Central Bank and Fitness and Probity regimes. The CB could well refuse to approve them for their next position.
And don't forget about the fines. The Central Bank could say "OK, Mr Hunt, we can't force you to treat these customers fairly. Now as part of our Sanctions Regime we are including your personal behaviour in the investigation. May we remind you or the possible outcomes?"
An individual, meanwhile, may be subject to:
- A caution or reprimand
- Disqualification from managing a regulated firm for a specified period, and / or
- A fine of up to €1m.
Under the Fitness & Probity regime, the Central Bank also has the power to suspend individuals or prohibit them from working in regulated financial services.
I really can't see how AIB could hope to get away with offering something less than Karen's deal, even if the CB allowed it. Think about it. If they offered you 6%, you would just go to the Ombudsman and get 12%.
They might offer an alternative. A refund based on a margin of 1.5%.
My own view is that they should simply say "We are offering you 12% of the balance and a further 5% in cash". If you have suffered extreme stress, we will listen to your application for compensation for that.
This could be done and dusted for 95% of their customers within 2 months.
But they will probably do something very complicated which will require an army of staff to process.
Brendan