NATIONALISATION of the banks would cost 10,000 jobs and add over €20 billion to the cost of borrowing, the Irish Bank Officials Association (IBOA) has warned.
The association’s general secretary, Larry Broderick, also ruled out Fine Gael’s twin bank strategy suggesting the country did not “have the time for these initiatives”.
Mr Broderick was speaking after he revealed that following month-long discussions with its members, the IBOA is giving “qualified support to NAMA (National Asset Management)”.
Citing estimates from Bloxham Stockbrokers, Mr Broderick said nationalisation of the banks would add €20bn to the cost of borrowing.
He said the IBOA believes that NAMA represents “the only realistic attempt to address the future of the industry”.
However, Mr Broderick said NAMA would not, on its own, be sufficient to get the economy through the current financial crisis. The IBOA demands that NAMA be backed by measures to ensure vital credit flows are directed into the economy.
Some of the proposed actions will repair the damaged banks, but Broderick said sweeping reform of the sector will also have to form part of the agenda if the IBOA is to throw its full weight behind NAMA.
The IBOA has called for some key initiatives that will change the “culture” within banking, including:
* A whistle blowers charter for staff in the financial services sector, backed by law.
* A DIRT-style inquiry to find out where the banks went wrong over the past decade.
* Expanded and more effective regulations to ensure proper control of the banks.
* A comprehensive strategy to determine the future direction of the banks in the years ahead.
The IBOA also made clear it would reject any attempt to scapegoat the general body of workers in the banks for the mistakes made by those at senior level.
Up to 5,000 jobs are likely to be lost in the next five years but those losses will have to be “negotiated settlements on the basis of no compulsory redundancies”.
Mr Broderick said the IBOA will also demand that current pay and conditions are maintained with “full trade union representation for all workers”. He said membership of the IBOA rose by about 3,000 to 23,000 in the last year.
In the long term workers, consumers and government agents will have to sit on the boards of the banks to ensure they stay accountable to those whose interests they are there to serve, he said.
As far back as 2004 the IBOA warned that Irish banks had “put profits before the interests of staff and customers” and this crisis provides an opportunity to put in place a more accountable banking system, Mr Broderick concluded.
© Irish Examiner Ltd. All rights reserved