‘Pay caps hamper recruitment’ according to Central Bank deputy governor

The deputy governor of the Central Bank has warned that public sector pay restrictions and the lure of better pay at the European Central Bank are damaging its ability to retain staff.

‘Pay caps hamper recruitment’ according to Central Bank deputy governor

Cyril Roux told the Banking and Payments Federation’s banking union conference limitations on what public sector staff can be paid disadvantaged the bank in its attempt to keep staff.

Mr Roux added that the combined effect of the pay restrictions and the lure of better remuneration working as part of the ECB in establishing the Single Supervisory Mechanism (SSM) could jeopardise the quality of the Central Bank’s banking supervision.

“One of the critical success factors of the SSM has been the ECB’s success in attracting high quality staff,” said Mr Roux.

“Many of them are experienced banking supervisors coming straight from the national banking authorities, including the Central Bank of Ireland.

“They have been attracted by the exciting challenge of working abroad, in helping establish the SSM, and the much better financial terms and employment conditions offered to them.

"A second wave of supervisors is expected to leave the Central Bank and other national competent authorities next year, as the ECB will be increasing its SSM headcount by 25%.

“Combined with the familiar constraint of FEMPI [public pay restrictions], this will bring further stresses to the bench strength of banking supervision in the Central Bank, and to the challenge of replenishing once more our ranks.”

The Central Bank last week confirmed 29 staff received top-up payments worth more than 20% of their salaries in a scheme introduced last year that would ultimately cost no more than €501,530.

The bank denied the payments constituted bonuses but instead insisted they were retention payments designed to keep staff in strategically important roles.

A second retention payment scheme in operation between 2011 and 2014, which rewarded eight employees, subsequently came to light earlier this week, drawing the ire of staff and unions, with Unite taking the decision to hold a vote on a motion of no confidence in the bank’s senior management, the results of which will be known next week.

In total, €234,176 has been paid out to date under both schemes.

The motion is the first headache governor Philip Lane will have to deal with having only taken the reins on Thursday.

“[In May], we not only expressed our disquiet regarding the retention bonuses, we also specifically asked whether there were any other bonus schemes in place, and we were categorically assured that there were not,” Unite regional officer Colm Quinlan said.

“We were therefore extremely disturbed to discover that, while Unite members at the bank were holding their AGM [on Thursday], the bank issued a press statement confirming that, contrary to previous denials, another bonus scheme has in fact been in operation since 2011.

“The bank’s earlier denial of this scheme’s existence, and their decision to belatedly issue a press statement admitting its existence while our members were meeting, constitute apparent duplicity.

"These actions indicate a worrying level of disrespect for their staff, and for the general public which relies on the Central Bank to lead the way in terms of probity.”

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