THE FINANCIAL REGULATOR has failed in its job of protecting consumers by providing a safe and fair market, according to a damning assessment by a Government-appointed watchdog.
“We believe it is unacceptable that the board of the Financial Regulator has failed to take responsibility for their stewardship of the organisation during the last six years. This failure undermines their ability to enhance or enforce corporate governance in the wider financial services sector.”
The regulator’s failure to “get tough” with overcharging by Irish Nationwide and the concealment of director loans in Anglo Irish Bank sent out a signal that it was not serious about policing the big banks, the report says.
Of course, I imagine there's absolutely no action that could be taken against the board.
An avalanche starts with the first pebble.
What I hope we're not going to see is the usual pillorying of individuals.
It's a very hard hitting report. No punches pulled.
It can be seen in full [broken link removed]
Brendan
I just don't agree that we had a "highly visible property bubble". The majority view from economists at the time awas that there would be a soft landing. That was certainly the view of the Governor of the Central Bank which would have been the most important view as far as the Financial Regulator would have been concerned.In Ireland, consumers have been particularly hard hit by the failure of the FR to adequately intervene to deflate a highly visible property bubble including the failure to clamp down on risky products such as 100 per cent mortgages, interest only mortgages and mortgages with longer terms, some as much as 40 years. The FR also failed to rein in speculative lending by banks to the property sector leaving the banking system highly vulnerable to an external shock.
...
It is not a case that the Panel “is being wise after the event”. The Panel sought a meeting with the prudential executives to report on their work. These requests were ignored at a time when the crisis was imminent. The then Chief Executive Mr. Pat Neary assured the Panel that the „‟ banks were solid, and subject to weekly reviews with the regulation at the highest level‟‟. The Panel raised questions about the FR ability to deal with systemic characteristics of the international financial services market.
Hmmm, that point is debatable.I just don't agree that we had a "highly visible property bubble". The majority view from economists at the time awas that there would be a soft landing.
It's a great report.
The majority view from economists at the time awas that there would be a soft landing.
I am open to correction, but I don't think we ever said "There is a highly visible property bubble and you should take dramatic steps to deflate it".
People need to stop blaming others and take responsibility for their actions. Also, when in the last thousand years has Ireland taken a lead in anything besides Irish Dancing contests and the Eurovision?
Speaking at a press briefing, Central Bank Governor John Hurley said that the Irish economy performed very well last year and the overall picture is positive with a growth rate of about 5 per cent forecast for this year. “This level of growth remains favourable by comparison with other economies with broadly similar levels of incomes”, he said.
The Governor added that there will be some moderation in growth next year, which will reflect a return to a more sustainable level of housing output and more moderate consumer spending; however, the outlook remains favourable, with a projected growth rate of about 4 per cent in 2008.
Referring to the recent trends in the property market, particularly regarding prices, the Governor said: “Current developments in house prices are more consistent with stability in the market. Looking forward, it is important to recall that the major underlying factors supporting the demand for housing are employment growth, increases in incomes, demographics and social changes. The prospects for these key factors remain favourable, even allowing for some moderation in the growth rate of the economy. We continue to believe that the most likely scenario is a soft landing for the housing market.” He welcomed the recent deceleration in the rate of growth of credit in the economy and said that if trends continue the growth rate of mortgage credit should be substantially lower at the end of the year.
The Governor pointed to some downside risks to the outlook for the economy, including external factors such as exchange rate risks and oil price volatility. He also said that domestic vulnerabilities include the housing sector and competitiveness. The Governor highlighted the need to keep a focus on all the various factors that can contribute positively to the economy’s competitiveness and its ability to respond flexibly to any unanticipated slow down. One element of this is maintaining a strong fiscal position.
Looking forward, it is important to recall that the major underlying factors supporting the demand for housing are employment growth,
Beyond issuing occasional bland warnings of the possible dangers of the over-exposure of the Irish banking system to property-based lending in official Central Bank publications, neither Hurley nor Financial Regulator Patrick Neary seemed to have a clue what to do about the rapidly inflating property bubble.
http://www.rte.ie/news/2006/0712/economy.htmlThe Central Bank has expressed concern about the recent rises in house prices and said there is an increased risk of a sharp correction to the property market.
The bank's Governor John Hurley said the recent rises in house prices did not appear to be consistent with the rest of the economy.
At what point do you intervene to stop a property bubble. The economy benefited hugely from the property market in the last ten years. People need to stop blaming others and take responsibility for their actions.
Blaming the regulator for trying to regulate and the banks for trying to lend and developers for trying to make a profit feels somewhat naive.
It says consumers have been hard hit by the regulator’s failure to deflate the property bubble,
I am open to correction, but I don't think we ever said "There is a highly visible property bubble and you should take dramatic steps to deflate it".
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?