‘Profound and substantial’ changes needed in banking

SUBSTANTIAL and profound changes to banking regulation are needed to create a solid banking system, according to an industry watchdog.

At the presentation of its annual report for 2008, the Financial Services Consultative Industry Panel, which was established five years ago as an independent regulation watchdog, said corporate governance in the Irish banking sector has been found “severely wanting”.

Panel chairman David Went, the former chief executive of Irish Life & Permanent, said while the Irish and international financial systems have suffered a systemic shock over the past year, regulatory standards in the banking sector here and abroad “have proved inadequate to deal with the unprecedented turmoil that has emerged”.