Report exposes Financial Regulator’s ‘shortcomings’

THE country’s financial watchdog expects to announce its new director of financial supervision within the next three weeks.

He will replace Patrick Neary, forced to resign last January following claims that staff at the Regulator’s office knew since January 2008 that the disgraced chairman of Anglo Irish Bank Seán FitzPatrick had been transferring loans of up to €87 million off the bank’s book to conceal them from shareholders.

News of the appointment comes as the Financial Regulator was left red-faced yesterday by the leaking of a confidential report it commissioned into its internal operations which was carried out by consultancy group, Mazars.

A year on from the near collapse of the Irish banks, leaked details of the report found the organisation was short on top-level regulatory staff compared with similar bodies elsewhere.

It found the Financial Regulator carried out fewer consumer inspections and was less proactive in enforcing changes in financial institutions over which it has supervisory responsibility.

The “strictly confidential” and “not for publication” report found not enough staff were detailed to carry out the crucial task of supervising the banking sector.

By comparison the study found the supervisory body had too many administrative staff and had failed to strike a balance between its core supervisory roles and the task of internal administration.

Mazars said also, while there were serious shortcomings in the crucial supervisory area, there were positives also. It found a substantial number of strong processes and “examples of best practice and effective systems” were in place in many parts of the organisation.

A spokeswoman for the regulator said she “could not comment” on what was said to be in the Mazars report, but added that key weaknesses referred to in the report are being addressed.

Up to 20 additional staff have been recruited to boost the regulatory side of the operation, she said. These are top calibre people with the credentials necessary to identify and correct weaknesses in the financial sector.

Since June the Financial Regulator has advertised for a further 20 posts as further back-up to the group’s supervisory role.

The report is understood to have endorsed moves within the organisation to organise a number of prudential departments around “financial analysis units” that Mazars said would allow specialist teams of supervisory analysts to interrogate prudential returns.

When fully established, that move should continue to yield greater processing efficiency the report is understood to have concluded.

© Irish Examiner Ltd. All rights reserved

More in this Section

The last thing we need now is a populist budget

‘Reluctant landlords’ should offer budgetary lesson

Greg Kavanagh appeals planning decision for €15m development in Dublin

Is EU digital copyright reform a Google news tax?


Breaking Stories

European leaders say UK access to EU market tied to workers' rights

A cuckoo clock that brushes your teeth? Meet Joseph Herscher and his brilliant inventions

Dutch bike company comes up with genius solution to reduce shipping damages

Noonan: Ireland 'under no pressure' from Europe to alter 12.5% corporate tax rate

Lifestyle

Why Ireland's gay community will always be grateful to Fair City

Open House Cork is back to give the public a sneak peak of more private homes

Film-maker John Boorman is going in a different direction with his debut novel

How to get the kitchen you deserve

More From The Irish Examiner