Complainer
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For €87million? Wouldn't they need to ensure that the solicitor has resources or insurance to back up an undertaking of this size?
Questions for the Financial Regulator
- Thread starter Brendan Burgess
- Start date
I fear PN is toast.
Looks like it - Lenihan looks to be sending a clear signal to the board:
"It is not my job to express confidence in people. The chief executive is accountable to the board," Mr Lenihan told the Sunday Independent. "I am deeply concerned that this information only came to light when I asked about it. Clearly the board have a job to do, and must resolve this matter as soon as possible."
Would be better for the Finance Minister to show some leadership and demand PNs resignation himself, but I suppose that will never happen in the public service.
I think you interpret the Minister's words correctly at one level, and in your final paragraph you, if I may improvise a word, uninterpret them.
As the Minister is not his direct employer, it would be wrong for him to demand PN's resignation. I think Lenihan is being very correct on protocol, but making his wishes clear.
Duke of Marmalade
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Appears to be just one possible explanation that would let PN off the hook. This is if his office knew but he didn't.
Z
z109
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From the chat on the various radio shows this morning, this appears not to be the case and that the regulator knew at least a few months ago and almost certainly before the meetings last week.
I don't think it is a time for following protocol. To ask a hypothetical question, if the boards decided to leave PN in place should be minister be bound by their decision? The country is crying out for some strong leadership and this is a clear case where some could be provided. I would imagine that the reluctance of the government to start sacking people for incompetence is beacuse they can see that in no short time they would be getting a knock on their own door!
Protocol is more than a matter of being mannerly and pleasant: it is a matter of doing things the right way.
Yes, we need leadership, and I agree that the government generally has not been impressive in its response to the crisis. But if we tear up the rulebook, what we get is not strong leadership, but tyranny.
Fair point, hopefully PN will do the honourable thing after having a read through the sunday papers...
I know what you are saying, but has the rulebook not been shredded in the last couple of months considering what has happened.
What we are getting is long drawn out committees or slow decisions made at all levels.
These are desperate times and confidence in the banking sector and financial regulator are at a shocking low. For me leadership comes with decisive action, sometimes unpopular, sometimes ripping up the rulebook.
Now isnt the time to be diplomatic about how you approach a crisis thats gripped the country.
Perhaps it could be argued that the government are keeping their heads when all around them are losing theirs. Thats a fair point, but they need to quickly instill confidence in the FR ! !
Brendan is right, the FR had a chance to be the knights in shining armour, the clean cut regulators we all crave, but instead look just as "dodgy" as the banking sector. I know this isnt the case, but in trying to keep confidence in the banking sector, they have further eroded any feeling that they are being regulated or that there are any repurcussions to their actions . .
We need decisive action (provided it is the right action); we need it reasonably quickly; tough decisions need to be made, and people should suffer the consequences of the things they have done wrong through commission or omission. But we need it done the right way, or we are just as bad.
Brendan Burgess
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It is the board of the Financial Regulator which must make the decision on whether to terminate Pat Neary or not.
They should carry out a quick investigation and make the right decision based on the facts. They should not fire Pat Neary because it is politically expedient or because of media headlines.
If, for example, Pat Neary told the Chairman, and the Chairman decided against bringing it to the board or to the Minister, then it would be the Chairman who should go. There is no evidence for this, but it is one possible explanation.
Brendan
They should carry out a quick investigation and make the right decision based on the facts. They should not fire Pat Neary because it is politically expedient or because of media headlines.
If, for example, Pat Neary told the Chairman, and the Chairman decided against bringing it to the board or to the Minister, then it would be the Chairman who should go. There is no evidence for this, but it is one possible explanation.
Brendan
Going back to Duke of Marmalade's contribution at the start of this thread, I too am struggling to understand why the FR may not have told the Minister of Finance. DOM speculates on one possibility: that he did tell him, in which case we really do have a scandal.
There is another possibility.
Going back to last January, when the FR discovered the warehousing during its review of IN, Brian Lenihan wasn't the Minister for Finance. We had a very different regime, with Bertie in overall charge and Biffo in Finance. In that environment, it is much easier to believe that the FR told the Minister and was given his riding instructions not to do anything about it. This could also explain why Brian can honestly say that he didn't know. Is this speculation too far-fetched?
There is another possibility.
Going back to last January, when the FR discovered the warehousing during its review of IN, Brian Lenihan wasn't the Minister for Finance. We had a very different regime, with Bertie in overall charge and Biffo in Finance. In that environment, it is much easier to believe that the FR told the Minister and was given his riding instructions not to do anything about it. This could also explain why Brian can honestly say that he didn't know. Is this speculation too far-fetched?
Brendan Burgess
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I see little point in a conspiracy theory.
The Financial Regulator says that they did not inform their board or the Minister.
The Minister says that he was not informed.
The FR works in strange ways and we should focus on trying to guess why he did not inform his board or the minister.
The Financial Regulator says that they did not inform their board or the Minister.
The Minister says that he was not informed.
The FR works in strange ways and we should focus on trying to guess why he did not inform his board or the minister.
Guys,
Something tells me there is a lot more to this and a lot more to come , Is it just me or is the silence for all camps just a little to weird ?
It seems like everyone knows whats coming down the river , I think we might be reading alot more in the coming weeks .
Call me paranoid but something smells fishy here ?
Something tells me there is a lot more to this and a lot more to come , Is it just me or is the silence for all camps just a little to weird ?
It seems like everyone knows whats coming down the river , I think we might be reading alot more in the coming weeks .
Call me paranoid but something smells fishy here ?
LDFerguson
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Two questions that I'd be curious about: -
- What was FitzPatrick's €87M used for?
- Why did he go to such lengths to hide these loans over an eight year period?
Just wondering if Seanie & Mr Fingleton complied with all money laundering legislation ie. did Seanie bring down one of his old gas bills and passport / driving licence when seeking to arrange the warehousing facility. I was amazed to hear Minister Hanafin saying "there's no laws broken here and we accept that" - sounds premature for such statements to say the least!
Roy
Brendan Burgess
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Here is another possible scenario.
1) The FR discovers the loans to Sean Fitzpatrick
2) They decided that they were not illegal
3) They did not want to publicise anything in case they would rock confidence in Irish banks
4) Sean Fitzpatrick said that he would repay the loans before the company's year end, so they would not appear in the books and he would not take out the loans again.
5) The FR accepted this - problem solved.
6) Sean Fitzpatrick was unable to repay the loans - problem unsolved.
1) The FR discovers the loans to Sean Fitzpatrick
2) They decided that they were not illegal
3) They did not want to publicise anything in case they would rock confidence in Irish banks
4) Sean Fitzpatrick said that he would repay the loans before the company's year end, so they would not appear in the books and he would not take out the loans again.
5) The FR accepted this - problem solved.
6) Sean Fitzpatrick was unable to repay the loans - problem unsolved.
Possible but still doesn't excuse the regulator. They knew that the bank did not make full disclosure to shareholders and should have acted. At the very least they should have informed the Banks auditors and let them decide if they could sign off on the accounts without the disclosure. I have talked to people in the market in London over the past few days and the reputational damage that this has done Ireland should not be underestimated. He might not have broken laws (I would imagine there are shareholders getting opinions on this as we speak) but what Fitzpatrick did was to severly damage the credibility of Irish Banks financial statements. (And they didn't need any help in this regard!) The Regualtor has by staying quiet for whatever reason damaged the credibility of our our entire regulatory framework.
Dave Vanian
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Hi Brendan,
I think your scenario above ignores the fact that Seanie repeatedly did his little dance with Fingers and INBS each year for eight years. In discovering (1) above, the FR presumably also discovered that the exercise had been repeated seven or eight times. While it may not have been illegal, it's obvious that it was done to withold information from shareholders.
In my opinion, the FR should have advised the Minister at latest at the time the Guarantee Scheme was being implemented so that the Minister would have a clear idea as to the character of the people running the banks so guaranteed.
There is an issue more fundamental than those questions posed by Brendan to open this discussion: the culture of regulation in relation to the financial sector has been described as "light touch". To some people, that means not regulating very much, being easy on the institutions, and nudging them gently towards correct behaviour rather than taking a strict line; to some other people, it seems to mean letting the institutions do pretty much as they please. I don't think many people have a view that the regulation regime is one of close supervision and enforcing strict compliance.
That culture was not created by Patrick Neary on his own (although it seems to me that he accepted it fully). It emerged from interactions between our political, administrative, and financial establishments. In effect, regulation was close to being a sham.
Sunny is right that the credibility of our regulatory framework has been damaged. But I don't think anybody can say it was unfairly damaged.