Finnish watchdog to head banking inquiry

A banking expert from Finland will investigate Finance Minister Brian Lenihan’s handling of the financial meltdown, the Government confirmed today.

Peter Nyberg, a former watchdog in the Scandinavian state, will take charge of the €2m inquiry into how the regulator and the Central Bank handled the country’s top lending houses.

Mr Lenihan said: “I am pleased to announce that Mr Nyberg has agreed to take on this important role. He brings a wealth of experience to the position based on his career in the Finnish Finance Ministry and elsewhere.”

The minister said both he and officials in his department could be called to explain decisions on their handling of the crisis.

Mr Nyberg will decide himself whether to hear evidence in public, but Government sources suggested that was unlikely.

The experienced economist has seen first hand the aftermath of a banking crisis after Finland suffered a similar meltdown among major lending institutions in 1991. The Nordic collapse was largely put down to a combination of bad banking, lax regulation and poor market discipline. Mr Nyberg also has experience of the measures needed to repair a shattered banking sector.

The Government has agreed to widen the scope of the investigation with the inquiry stretching from 2003 to January 2009, when Anglo-Irish Bank was nationalised.

It will look at the lending and investment policies of the six main banks covered by the state guarantee scheme – Bank of Ireland, Allied Irish Banks, Anglo-Irish Bank, Irish Nationwide, Permanent TSB and EBS.

Two other separate inquiries – an internal examination of the quality in the Department of Finance and the Oireachtas Finance Committee probe into Government policy – will also be set up.

The Finnish expert’s career also includes a senior economist position at the International Monetary Fund with responsibility for analysis and forecasting for a number of European Countries, including Germany, Austria and Switzerland.

He has been the former director general for financial services at the Finnish Ministry of Finance since 1998. His job entailed responsibility for financial market legislation, stability and liaising with the IMF and European Union finance groups.

He was advisor to the Board at Bank of Finland, with responsibility for financial market stability issues, for banking crisis resolution proposals and preparations for Finland’s entry into the euro.

He also held Head of Office at Bank of Finland, in the Foreign Exchange Policy and Financial Markets Department.

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