Richie Boucher: We need more pillar banks

There has to be more than two pillar banks to support the economic recovery, according to the chief executive of Bank of Ireland, Richie Boucher.

In the early part of the last decade there were too many banks in the country that led to unsustainable competition, he said.

However, evidence from other countries would suggest that there should be between three-to-four pillar banks to support the domestic economy. Mr Boucher was speaking at the Ibec CEO conference in Dublin.

In response to a question by RTÉ’s Bryan Dobson about how Bank of Ireland got into difficulties in the years leading up to 2008, he said: “Obviously everyone did things to different degrees. But when there is a wild party even good girls get into trouble.”

Bank of Ireland received a total of €4.8bn of taxpayers’ money. It has repaid €5.9bn and the Government still owns a 13% stake in the bank, noted Mr Boucher. It was very important that the Government was fully repaid its initial investment so that every member of staff of every Bank of Ireland branch could look the public in the eye, he added.

He acknowledged that the banking system has created a great deal of hardship through cuts to public services and a legacy of high debt levels. Banks can never again pose a threat to the solvency of the State, he added.

The vast bulk of Bank of Ireland mortgages in arrears will be restructured in a sustainable manner, although there will be a rump that cannot be resolved through a restructuring, he said.

The bank will pump roughly €30bn into the economy through new lending over the next five years.

Also addressing yesterday’s conference, Feargal O’Rourke — head of tax services at PwC — said transparency will be the defining feature of tax strategy, at both company and national level, over the remainder of this decade.

He also called for Irish businesses to “engage in a public debate” on how the tax environment is likely to look in the coming years and help drive strategy, rather than leave it solely to the Government and the OECD.

“There is no doubt that there will be changes to our tax system in the short to medium term, which may appear dramatic, but Ireland’s tax offering will evolve with global norm,” he added.