Pat Neary Retires - latest Anglo victim?

Discussion in 'Economic issues' started by mathepac, Jan 9, 2009.

  1. mathepac

    mathepac Frequent Poster

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    Following publication of the long-awaited report into the handling of the Anglo-Irish Bank directors' loans controversy, the Financial Regulator, Patick Neary has announced his retirement.

    For me there is a sense of deja-vu about his retirement, given that the report cited pressures of work, lost correspondence and internal communications problems as reasons why Mr. Neary was not appraised of the loans problem at Anglo.

    Is this yet another case of no-one being responsible / accountable?
     
  2. Simeon

    Simeon Guest

    Re: Pat Nearey Retires - latest Anglo victim?

    It's a case of the Regulator not regulating. So, in his case a breach of contract. Should he not have got the high jump before being given the chance to retire?
     
  3. capall

    capall Frequent Poster

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    Re: Pat Nearey Retires - latest Anglo victim?

    Is he really retired or is he just shunted sideways to another civil service post with the same pay.
    He will be retiring on a nice fat guaranteed pension anyway,what does he care
    Pity he wasn't on a private sector pension invested in irish bank shares
     
  4. Spondulicks

    Spondulicks Frequent Poster

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    Re: Pat Nearey Retires - latest Anglo victim?

    Who is on the Authority there, what are they paid, what are they doing? The systems procedures and processes sound dreadful from the Authority's own statement. They better stop sitting on their hands now as we are all paying more on the government borrowings which are rising by the billion.
     
  5. Brendan Burgess

    Brendan Burgess Founder

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    Re: Pat Nearey Retires - latest Anglo victim?

    Full statement from the Authority:

    Statement by Authority

    The Committee established by the Authority on Saturday 20 December 2008 to undertake an urgent review of directors’ loans at Anglo Irish Bank and the regulatory response has today (Friday 9 January 2009) delivered its report to the Authority. The Authority has accepted the report.
    The essential task of the Committee was to look within the organisation at two issues: when the information about these loans was obtained by the organisation, and how the information was communicated and followed up by way of response. It did not include an examination of any other issues relating to Anglo Irish Bank, which are the subject of a separate and ongoing investigation.
    The Authority is subject to strict obligations of confidentiality under legislation and has been legally advised that it may not publish the Committee’s Report. Nevertheless, it is conscious in the interests of transparency and public interest in this issue to outline the essence of the main elements of the Report.
    Conclusions
    In summary, in relation to dealing with the issue of directors’ loans in Anglo Irish Bank, the Committee concluded that there was a breakdown in terms of internal communications and process and in the regulatory follow-up and response of the organisation. This resulted in a failure to take appropriate and timely actions in relation to what was a serious matter and to escalate the matter to the Authority.
    In particular, the Committee concluded that:
    · if the information available from Anglo quarterly returns had been monitored more comprehensively the issue of directors’ loans could have been identified much earlier from the returns dealing with Large Exposures;
    · once the matter of directors’ loans had been identified it was pursued actively by the Banking Supervision Department (BSD). Two meetings took place between BSD and Anglo;

    · the organisation did not use its discretion under its legislation to alert the Director of Corporate Enforcement at the initial stages;
    · the matter was not pursued with Irish Nationwide at the time. It is now being pursued under the separate review initiated by the Authority;
    · the discussions with Anglo were not broadened out to include Anglo’s Head of Internal Audit, the Chair of the Audit Committee and the external auditors;
    · while concerns persisted in BSD the matter was not pursued partly because a letter from Anglo went missing and partly because of the pressure on officials from the unfolding of liquidity problems in financial markets and in individual institutions;
    · the Committee noted that while the pressures referred to above did not explain what occurred they are an essential part of the background;
    · the issue did not surface again internally, even in Autumn 2008, when major stability and strategic issues were being addressed by the authorities including the Government;
    · in relation to the particular issue of whether this matter had been mentioned to the Prudential Director and Chief Executive after a wider meeting had concluded in January 2008, the Committee was impressed with the coherence, clarity and belief in their stated recollections of the people concerned and their integrity. Nevertheless, the evidence presented to the Committee on this issue could not be reconciled by the Committee. There is no suggestion from any party that any communication – verbal or written - on this issue was made to either the Prudential Director or Chief Executive in the period (subsequent to January) to December 2008.

    Recommendations
    In its concluding remarks, the Committee noted that it had been greatly impressed by the quality, dedication, commitment and strong work ethic as well as the integrity of the officials with whom they engaged. The Committee noted the pressures that the staff had faced since the onset of the crisis in the global financial system in August 2007 and noted issues with staffing requirements. The Committee noted that the adequacy of existing resources would need to be kept under review particularly where modification of the approach to regulation and more intensive supervision would require more staff.
    The Committee observed that the system of regulation that operated in Ireland was highly regarded internationally. However, the events of 2007 and 2008 in the financial environment globally pointed to serious inadequacies in systems of regulation operating across the world. Ireland is no exception and a much more intensive type of regulation has been introduced here under the Government Guarantee Scheme and this position is developing all the time.
    The Authority notes and accepts the recommendations of the Committee and is committed to implementing them in full. These are:
    · The review of our strategic regulatory approach in the light of developments in 2007 and 2008, to which the Authority is already committed, should be advanced as quickly as possible. The review should ensure that the organisation meets its statutory mandate and responds to the changed regulatory environment and to EU and international developments in financial regulation.
    · The staffing requirements for the organisation should be reviewed on the basis of both the strategy review and also of the outcome of the work being undertaken by external consultants for the Authority, specifically the Business Process Review and Benchmarking against comparator financial regulators and other similar businesses, which is expected to be concluded shortly.
    · Any changes recommended by these consultants in the organisational structure and reporting lines within the Financial Regulator should be examined and if considered appropriate acted upon by the Authority as a matter of urgency.
    · While no process can eliminate the need for the exercise of good judgement by officials, existing internal communication and escalation procedures and procedural manuals should be reviewed taking account of the lessons to be learned from this report and the ongoing separate review of directors’ loans initiated by the Authority.
    · Filing and document management and tracking arrangements should be improved.
    · The review instigated by the Authority to determine the treatment of directors’ loans in all institutions covered by the Government Guarantee Scheme should be completed at an early date.
    · Loans to directors should be examined in greater detail, especially to ensure that loans to any business in which a director has a major interest (defined as 10 per cent or more of the shares or voting rights) are being included in returns to the Financial Regulator.
    · Arrangements should be made to ensure more effective monitoring of the more important prudential returns, including those for loans to directors, with on-line submission and built-in data validation and checking processes A progress report should be made to the Authority by end-February 2009.
     
  6. mathepac

    mathepac Frequent Poster

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    Re: Pat Nearey Retires - latest Anglo victim?

    23% of current expenditure has to be borrowed and the 3 year deficit has now extended to 5 years (RTE News tonight).

    We have all these useless, highly-paid, do-nothings disappearing into DB superannuated anonimity, leaving us to pick up the tab.
     
  7. ClubMan

    ClubMan Frequent Poster

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    Re: Pat Nearey Retires - latest Anglo victim?

    Doesn't surprise me in the least that IFSRA can't even manage their filing systems properly.
     
  8. Bob_tg

    Bob_tg Frequent Poster

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    Re: Pat Nearey Retires - latest Anglo victim?

    I second that.
     
  9. Brendan Burgess

    Brendan Burgess Founder

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    Pat Neary and the Financial Regulator made a serious error in their handling of this issue. But to suggest that they are useless is to ignore the 40 years (?) of Pat Neary's service in the Central Bank and Financial Regulator.

    One would think reading the commentary that Ireland was full of absolutely brilliant, committed, error-free workers, all working at junior levels while only the guys at the top were useless.

    Brendan
     
  10. webtax

    webtax Frequent Poster

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    But it's the guys at the top who create the culture. The financial regulator has such a reputation for treating the banks with kid gloves that it is not surprising that a junior employee saw fit to ignore these loans.

    Have the terms of Neary's retirement package & pension been revealed? The taxpayer will be picking up the tab for these €100m loans via the guarantee scheme, so surely Neary's retirement deal should suffer also?
    The government was quick to voice it's opposition to the 'failure bonus' for Mannion in Aer Lingus. Why not the same moral stance when they are handing out failure bonuses to FÁS & FR executives.
     
  11. corkfella

    corkfella Registered User

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    Brendan,

    I have noticed you are very quick to defend Mr.Neary, why is this?

    Pat has served for 40 years as a public servant and has been well paid to do so, he will retire with a very generous pension, this surely covers his service to this state?

    The facts show that on his watch bank lending was allowed to go out of all control and people were allowed to borrow 7 or times their incomes and not the normal 2 to 3 which would be affordable. His treatment of the banks is laughable, do you believe him when he says he knew nothing of fitzpatricj anglo loans? I certainly don't.

    Corkfella.
     
  12. capall

    capall Frequent Poster

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    I guess people are angry that in Ireland the people who have contributed to the current economic crises senior bankers,politicians,some civil servants will not be the ones who will suffer because of their misjudgements and incompetence. OK they might be demoted ,fired even but they won't suffer economic hardship they are cocooned from the financial fallout
     
  13. Padraigb

    Padraigb Frequent Poster

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    It might be that Neary was not the guy who created the culture. I suggest that we look back to the creation of the IFSC to find the point where Ireland jumped from a conservative approach to regulation to a free-for-all culture (The favoured euphemism being "light touch"). It may be that we should go back to that nexus between the political, business, and administrative establishments to analyse the origins of the culture. And it is the responsibility of our politicians to resolve the conflicting demands and needs of various interest groups in such a way as to benefit society (Society. Remember that idea? It's about people rather than wealth.)

    Public service pension packages are no secret.

    Because they are not bonuses: they are the normal retirement packages.
     
  14. Brendan Burgess

    Brendan Burgess Founder

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    Corkfella said

    Actually since its formation, I have been one of the strongest critics of the Financial Regulator. I have been critical of their failure to take robust action long before it became a matter of public debate. But I have always been balanced. I recognize their achievements as well as their failures.

    I have set out a full assessment in this article, but it was before we knew about Fitzpatrick's loans. This article is discussed at length in this thread.
     
  15. tiger

    tiger Frequent Poster

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    I think it is right that Neary should go.
    I would agree with the point that he didn't create the culture. He probably got to the position he had because he didn't rock the boat & wouldn't upset things (safe pair of hands). I think it's now fair to say that approach hasn't served the ecomony well.

    I also feel that he didn't benefit personally from any wrong doings (other than his salary), which may not be the case for some others involved & some of our politicians...
     
  16. Carramore

    Carramore Frequent Poster

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    There is a culture in this country of people not taking responsibility. Pat Neary's departure was very belated and, when it did come, was accompanied by wonderful tributes from the Board on his "retirement". There has been no mention about the position of Con Horan, Head of Prudential Supervision, who must take primary senior management responsibility in the FR for the mess over the non-disclosure of Fitzpatrick's kiting. I suspect that Board have decided that he's too young to depart on the pretext of retiring, so nothing is done.

    The private sector isn't immune. It took the Finance Director of Anglo a long time to offer his head on a plate, and then again it was on the pretext of retirement. In Anglo, there has been no mention of the Internal Auditor resigning. I bet that, like Con Horan, he/she is too young to "retire".

    Maurice Pratt, why aren't there more like you?
     
  17. nad

    nad Frequent Poster

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    All i've to say on this is i don't believe Mr Neary is a victim,more a case of him not doing the job the was appointed to do for what reason no one knows only him.
     
  18. Padraigb

    Padraigb Frequent Poster

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    That's a damning judgement. Perhaps you can back it up by telling us what job Neary was supposed to do: was he supposed to enable banks to do what banks do, or was he supposed to restrict them?

    I gather Neary saw his role as an enabler. I don't think he created that view -- rather he got it from that shadowy institution known to us outsiders as "the establishment".

    I am prepared to say that I think Neary and his office erred on the side of being too easy on the banks; I am quite prepared to believe that internal communications in the office were poor. But if we start and stop the blame game there, then we are ignoring important questions.
     
  19. Spondulicks

    Spondulicks Frequent Poster

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    Did we learn nothing from the beef tribunal, the Dirt debacle, the various child abuse scandals? There is a rotteness in the way we go about governance in this country and the sooner we wake up to it the better. Otherwise the doodah will be all around us again in some other sphere in a very interval.
     
  20. Complainer

    Complainer Frequent Poster

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    Was Neary entitled to resign regardless of this issue, or was a special deal done? The light-touch regulation ethos came directly from McCreevy and McDowell who were hands-on in writing the legislation at set up the FR.