Report 'confirms urgent need for review of banking sector'

THE damning IFSRA report into AIB's operations drew widespread criticism last night from business and political circles as well as the bank's own staff.

The Irish Bank Officials Association said it was "saddened and angry" at the extent of the bank's practices.

IBOA general secretary Larry Broderick said: "there is an onus of responsibility on the financial services industry generally to restore the confidence and international standing of Irish banking. This can only be achieved by the industry taking responsibility for past mistakes and ensuring they are never repeated."

ISME, the independent business organisation, viewed the report as confirming the urgent need for a complete review of the whole banking sector. ISME chairman Robert Berney said: "what is particularly galling is the fact that AIB failed to notify the regulator as required by law of the extent of their overcharging of customers. This is indicative of the arrogance that pervades the banking sector and shows contempt not only for customers, but also for the regulators" The Irish Exporters Association said the report reflected badly on both the effectiveness of the IFSRA and the efficiency of AIB.

IEA chief executive John Whelan said: "we would urge greater vigilance by the regulator, but also exporters themselves will be more vigilant in their dealings with banks now that the bond of trust has been broken."

Fine Gael finance spokesperson Richard Bruton said the tone of the bank's response smacked of complacency and a failure to understand the level of public frustration. "The AIB statement is 1,800 words long, but the word 'regret' appears only once, in the final paragraph.

"There needs to be a serious mind-set change within the banking sector. On the evidence of AIB's statement today, it has still a considerable way to go before the public can feel confident that a new ethic is in place."

The Labour Party spokesperson on finance, Joan Burton, described the report as a "shocking indictment of banking malpractice."

"The single biggest question which remains unanswered today is why these practices went on for so long within AIB and why nobody seemed to do anything about it." Green Party Enterprise spokesperson Eamon Ryan said he welcomed the report and AIB's decision to repay its customer. He added: "but what is really needed is a change of culture in the bank. AIB management seems to have put quarterly profit targets ahead of the needs of their customers. The bank is going to have to do a lot more than pay back the money to regain trust."