Watchdog plans ‘crack team’ to monitor banks

THE Financial Regulator is finalising plans for a crack team of banking investigators to monitor credit institutions.

The hiring of the key advisers is being viewed as an attempt to patch over the “Achilles’ heel” in the Irish banking system along with identifying future weaknesses. The specialist panel will include experts in property valuation, forensic accounting and credit risk control.

It is the first time the regulator has brought several expert groups together under the one panel, it was confirmed yesterday.

Experts and advisers in a number of areas are being sought by the regulator and are expected to be installed by August. The areas include helping the regulator assess the exposure of a bank to property-related loans.

Treasury or liquidity experts are being sought to help guard against an institution’s funding drying up, as happened in Northern Rock in Britain. Forensic accounting experts will trawl through the books of credit institutions. The regulator wants experts in corporate finance to help query potential mergers between institutions as well as acquisitions and disposals by financial groups.

A final public notice by the Financial Regulator seeking the seven-group panel will be published in the coming days. A Financial Regulator spokeswoman said: “This is the first time we have put all the expertise together under one panel. Some are very specific. The framework is so the regulator can choose from it on an ongoing basis.”

The move comes as the Government considers splitting sections of the Financial Regulator between a new banking commission and a new financial consumer agency. Sources close to the regulator though said last night the hiring of its expert banking panel was expected to proceed despite plans to break up parts of the watchdog. Ray Kinsella, professor of banking and financial services at UCD, welcomed the expert panel. “They are patching over the Achilles heel in the financial systems, looking for holes that put it under strain.”

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