Financial Regulator faces Dáil watchdog

THE Financial Regulator, Patrick Neary, will be forced to answer questions on whether Irish banks were involved in irresponsible lending leading to the current financial crisis when he meets a Dáil watchdog today.

He will also be asked to explain how the Government’s proposed €400 billion rescue package for banks will operate in practice, when he meets a group of politicians.

Mr Neary will also be forced to answer questions on whether Irish banks were involved in irresponsible lending leading to the current financial crisis.

Politicians from all parties will grill Mr Neary and some of his colleagues at today’s meeting of the Oireachtas Committee on Economic and Regulatory Affairs.

They will be asked why the regulator did not do more to prevent the crisis that has forced the Government into promising the risky rescue package.

They will also be asked to outline how consumer interests will be protected by the proposed scheme and whether there will be a crackdown on risky lending in the future.

The senior figures from the Irish Financial Services Regulatory Authority (IFSRA) that are being brought before the committee include its prudential director Con Horan, head of bankingsupervision Mary Burke and its consumer director Mary O’Dea.

Committee chairman, Cork North-West TD, Michael Moynihan (FF) said: “Given that the Irish banks came close to collapse and required a €400 billion guarantee from the Government, concerns have been raised about the role of the regulator in supervising the banking system and whether the regulator’s checks and balances are adequate to deal with the sector and whether it failed to curb excessive and reckless lending by the banks.

“This meeting will afford us an opportunity to query those individuals charged with regulating the lending practices of the banks. It will also allow the regulator to provide clarity on how the banks will operate under the new guarantee scheme over the coming years and the role of the regulator,” he said.

Mr Neary has defended the work of his office and insisted that high-risk lending was not a major factor in the current problems of Irish financial institutions.

Bank chief executives are due before the Finance Committee to explain why they how they got themselves into this mess.