Role of Financial Regulator

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bamboozle

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is still amazes me how the nation's media (and trade unions) seems to be focusing its energy into allocating the blame of the nations Financial system squarely at the feet of the bankers.
Yes some bankers were rogues, yes some bankers were extremely well paid, yes some laws of corporate governance may have been broken but surely the finger should be pointing at those who are charged with monitoring & regulating the Financial Industry.
How the financial regulator can be allowed to resign and then given such an obscene payoff for quite clearly not doing his job is beyond me.

we can hark on all day about naughty bankers and their obscene salaries and rightly so but focus should be on how a financial system allowed such activities occur and bringing in measures to ensure the national financial system will never be so poorly regulated again.

remember it was over 2 years ago when the Irish Financial System was branded 'the wild west' for its lax regulations.

Finally, i am not a banker (in case anyone thinks i'm trying to stand up for them!)
 
I feel that the media has actually focused a large amount of attention to the questionable performance of the Financial Regulator. While not on the same scale as the bankers, but the Financial Regulator has had its' reputation shot down significantly.

It is in recessionary times and/or in times of scandal when we truly realise the shortcomings of regulators and auditors. When the tide goes out, we see who's swimming naked!

I have no doubt that regulation will be revised and hopefully it wouldn't be in the same manner as SOX has been in the US, where regulation went from one extreme to the other.

As regards the obscene payoff for the Regulator? A cynical opinion might be that he was given the extra 200k to keep quite about the issues that are now coming to light and perhaps future issues down the line! Another opinion might be that the Regulator regulated within a system of capitalism, and ironically experienced the benefits of what appears to be our current capitalist system; excess compensation for poor performance!
 
surely the issues that are coming to light should have been exposed at the earliest possible opportunity?
how on earth can the office of the financial regulator be aware of Fitzpatrick's loans since last March and no-one think of telling Neary?
it just defies all logic.
we need outsiders to come in and root out the dead wood in our Financial Industy and install a new Regulatory Authority
 
The ineptness of the Financial Regulator was flagged well in advance of the recession. In the years preceeding 2004 AIB stood over a system of overcharging its foreign exchange customers - software systems were updated to facilitate the overcharge. The system of over charging was known from the top management down in AIB, this was no error.

While the FR did facilitate the refund to customers which ran into 10s of millions of euro, not one piece of action was taken against the bank in terms of fines, not even a wrap across the knuckles.
 

Interesting times.

What type of structure do you think that a possible reformed Regulator may take? And then the next question is who regulates the Regulator?

How a body is regulated poses a problem. Self regulation has downsides. Government regulation also highlights shortcomings. Conflicts of interest, competency issues, and independence concerns seem to be a common theme that is following many associate bodies.

Are there any positives which we can take from the Financial Regulator and perhaps build on such positives?
 


well first of all, the banks need to know who is boss and to whom they are answerable to, the laughable 'soft regulation' which existed needs to be replaced with 'rock hard/water tight regulation' copy the German system or some other credible system

second answer, the financial regulator has been and is answerable to the Minister for Finance....yes the same Minister who 'forgot' to read that report on Anglo...
 
I'm aware that the Regulator is answerable to the Minister of Finance and a Financial Regulatory Board. Would you see this form of Government oversight suitable, as it could alter depending on the political agenda of whichever Government is in power?

Would you see any positives on the Financial Regulator's performance in recent years which could be kept and developed upon when the inevitable shift in regulatory change?
 


you make a very good point, however i'd imagine it would be nigh on impossible to give an independent body powers over a state body (i could be wrong)

in fairness though, its the role of government to govern, the minister of finance should have been making sure his department was watching the state bodies which are under it.
perhaps something like an independent body of economists (Ahern in UCG would be ideal) who would meet on a quarterly basis to report on developments.

i think we'd all agree that Dail Committees are not the answer given the nature of the lack their powers.


as for positives....we were all well entertained with the 'i dont know what a traker mortgage is' ad...am struggling after that!
 
I like that notion of an independent body to make quarterly assessments of a regulation system. Keep the scorecard for on a regulators performance is important.

However, the question remains if there are such people/ groups out there who would not have inherent politicial or business bias, and also have the expertise and courage to met awkward issues and potential dangers head on.

I would consider that the Regulator has had limited positives. On a day to day level, banks and financial institutions are aware about potential misleading in their advertisement. This is a small step, but it is good to have that awareness at a branch level. (And no, I am not condening the serious issues which the Regulator has not addressed concerning banks). The Regulator, while concentrating too much on the smaller issues, has solved a day to day problem that plagued the consumer.

Another positive has been the Credit Union sector of the Regulator. This section seems to have set appropriate guidelines concerning credit union activities, and has effectively caught poorly governed and poorly performing credit unions by ''the scruff of the neck''. Credit unions seem to have stabilised after a wobbly few years, although some bad debt and investment issues are still outstanding.

They would be two positives which I would compliment the Regulator on.
 
pretty damning appraisal of the Financial Regulator on morning Ireland this morning by Peter Oakes of Compliance Ireland.
 
Any further update on the proposed changing structure of the Financial Regulator?
 
bamboozle said:
pretty damning appraisal of the Financial Regulator on morning Ireland this morning by Peter Oakes of Compliance Ireland.
Click to expand...

I was not that tough on the regulator was I? I had a listen to the audio again(http://www.complianceireland.com/Press.html) and I think the most I said in responding to a question about criticising the Financial Regulator was (a) the Oireachtas didn’t get the regulatory result it desired despite having a (satisfactory) set of laws in place (using a board and management analogy); (b) that other regulators got it wrong (not a solid argument I grant you); and (c) no jobs for life for public servants in terms of being appointed to top regulatory roles – but rather we should have appointees appointed on a per term basis. I don’t believe that my answers were a ringing endorsement of the Financial Regulator or Central Bank either.

Funny, another person in another forum said I was very easy on them. Well at least there is some good debate on these issues in the public forums - which is what we should have been doing collectively since 2003 (and may be earlier). But I guess that bad news is the seller.

I think, as an ex-UK (FSA) and Australia regulator and now in constant dealings with IFSRA here, that I would like to add that I don't support throwing to the wolves lower level regulatory staff who (i) in their hearts know that what their superiors did (or did not do) was wrong, (ii) want to do better, (iii) are capable of doing more, and (iv) will do more, if an independent non-entrenched (i.e. Irish bank/financial services operative) is appointed to lead and most importantly engender a new way forward. I am forever an optimist (not to be so in the current climate would lead one to jump off a bridge!).

I believe the same issues apply equally in our banks and other financial/insurance entities too. There are some tremendous 'next level of management' types chomping at the bits to take the reins and restore the confidence so badly destroyed by their superiors. I was talking to one tonight who is in the pot as the next CEO of an Irish financial business. He is conversant in finance, strategy, marketing etc but what struck me was that despite all these rudimentary skills for a CEO, he thought the most important thing was governing the business in a moral and ethical way. When I pressed him on this idea, he said that survival is now judged on long term results and that the attitude of quarter by quarter results can no longer prevail. He has a hefty mortgage. So it looks to me that he his aligning his personal goal (paying off a large long term mortgage) with his corporate goal (long term shareholder value). Possibly a new way of thinking for the next crop of CEOs??

I don't get a chance to read this forum regularly, so if anyone is going to slag me off, please do so to my private email peter@peteroakes.com

Keep up the informed debate.


Peter Oakes
Compliance Ireland
[broken link removed]
 

It's hard to be so optimistic when one has seen so many bank scandals over the years with no one ever brought to book and actually the level of scandal getting worse. I would love to share your optimism. In fact if I saw a banker dragged into court I would start to have some optimism. Instead we have them swaning around golf clubs in Marbella and elsewhere and I don't just mean Seanie. These people have no shame and obviously they get no flak from their peers either. And why would they, all they get is pats on the back because obviously their peers are in on the game too and when will that change - never.
 
Folks on the same subject of FR ineptitude,

I wonder could any of you point me in the right direction of reporting the following scenario:

2 guys 'paid off' from a Financial Firm some time ago for some extremely sharp practice and more.. at the behest and indeed insistence of the FR.

Same 2 guys in a different guise have been licensed to operate in the exact same sector by the same FR??!!

Obviously I won't namenames on here but I do want to report this to proper authorities - any advice?
 
I'm no expert on this, but is the FR subject to the ODCE?
 
OPTIMUM said:
the Financial Regulator is regulated by the Financial regulator !!
Click to expand...

Well that's just about Ireland today in a nutshell..!

Surely there is some dept in this country I can contact about this ridiculous situation? If not, the Dept of Finance and Lenihan should be ashamed of themselves..:mad:
 
bren1916 said:
Well that's just about Ireland today in a nutshell..!

Surely there is some dept in this country I can contact about this ridiculous situation? If not, the Dept of Finance and Lenihan should be ashamed of themselves..:mad:
Click to expand...

Easy... The financial regulator is answerable to the Minister at the Dept of Finance.
 
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