Regulator calls for new banking blood

THE Financial Regulator’s office has called for new blood to be introduced to help run the banking sector and for more non-executive directors to join bank boards and to be paid higher salaries.

Touching on the subject of corporate governance in the banks, assistant director general at the Central Bank/Financial Regulator, Jonathan McMahon told the annual conference of the Irish Banking Federation (IBF), yesterday, that the challenge requires broader solutions than just supervisory powers.

Mr McMahon said the pool of non-executive directors in Ireland has been too small for too long and should be increased, partly through the incentive of financial institutions paying such directors more money.

“While new blood is required for the Irish banking system, the changes we’re seeking don’t exclude individuals employed by banks during the crisis.

“There are, clearly, ex-bankers who shouldn’t resurrect careers in the Irish banking system, but there are individuals who have sought to learn from the crisis, and whose experience will make them valuable members of our banks’ boards,” he said.

His conference address also confirmed the Central Bank will publish its new corporate governance standards code for the banks on November 8. On credit-risk management and the role of the Irish Credit Bureau, Mr McMahon said “if we act now to improve credit standards, we can instil knowledge and good practice for the future.”

“But supervision alone won’t achieve this objective. As we flagged in June, the role of banks in the supply of credit, and the infrastructure which supports credit- risk management, require reform. Top of our list is making sure that banks have more accurate and informative data for credit decisions. This argues for a fresh look at the role of the ICB,” he added.

He said while it is apparent there is discontent with the ICB, there isn’t yet a solution that would see it enhanced or replaced; but the Government, banks, private sector representatives and the Central Bank have been meeting to see what could result from better infrastructure.

More in this section

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up