Financial system ‘is being damaged’

THE head of the country's fourth largest bank says the country’s reputation as a financial services centre is being damaged by constant criticism of the banking system.

David Went, the chief executive of Irish Life & Permanent, last night likened the comments about Irish banks to that of developing countries.

“With some of the criticisms I hear and read, I wonder whether they’re talking about the unstable banking industry of some third world country or the banking industry at the heart of Europe’s outstanding economy,” Mr Went told the Institute of Bankers last night.

He said the sector has been a key driver of the Irish economy. He said banking employs 38,000 people and accounts for 4.6% of GDP.

He said that many international investors were increasingly asking questions about the overall level of support for the banking industry in Ireland and they were very attuned to media - and increasingly political - criticism of the sector.

“My concern is that after a period of relentless criticism, we’re coming closer to a tipping point where the cumulative effect could begin to influence the attitude of international institutions towards the sector.”

He acknowledged recent scandals at the big banks and said “there can be no place in banking or financial services for people with low standards of ethics”.

But he said the surveys by the Irish Financial Services Regulatory Authority showing the differences in costs among Irish banks were in danger of “defining the process by which cheapest is always best”.

“In financial services cost is never as important as value ... and consumer interests have to play a role in helping people to understand the difference.”

He added that across the industry there was no comparison between the efforts on improving customer service now compared to practices 20 years ago.