FINANCE Minister Brian Lenihan was yesterday accused of doing a policy back-flip in order to allow AIB to impose an insider as head of the bank.
Labour leader Eamon Gilmore insisted approval for the bank to install the same person in the roles of chairman and chief executive went directly against the previous Government stance on the matter.
Mr Gilmore said the Finance Minister had promised to bring in tough legislation last March to clampdown on crony capitalism but said nothing had happened since.
"He said that Ireland is planning to introduce tough legislation to clamp down on crony capitalism and excess bank lending in the wake of the property bubble. He said the measures would include a ban on cross-directorships and on chief executives becoming chairmen, as well as creating a Central Bank commission. Eight months later there is no sign of the legislation.
"Not only that, the Government appears to have changed its mind on the measure because it has approved the chairman and chief executive being the function of one person in one of our largest banks. What has happened to this legislation that was going to put an end to crony capitalism?" Mr Gilmore said in the Dáil.
Tánaiste and Enterprise Minister Mary Coughlan responded that the Government was committed to the reforms, but discussions were still under way between her department and Mr Lenihan over the scope of the legislation.
Meanwhile, Fine Gael finance spokesman Richard Bruton said the salary cap for top bankers must remain in place as long as the banks are being "propped up" by taxpayers.
Mr Bruton was responding to remarks made by recently appointed Central Bank governor Patrick Honohan in which he called for the Government-imposed ceiling on bank executives’ pay to be removed.
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This appeared in the printed version of the Irish Examiner Friday, November 20, 2009
