Somers admits his relationship with Neary was ‘cosy’

THE former head of the National Treasury Management Agency (NTMA) has described as “cosy” his relationship with the Financial Regulator.

Speaking on RTÉ radio’s Marion Finucane Show yesterday, Michael Somers said he had a “very good relationship” with former Financial Regulator Patrick Neary.

“We’d a very good relationship with him... one never believed anything was going wrong — remember this was 2002 to 2004 — and during that period... we had a very good working relationship.”

Mr Somers said the banks were never made feel they would lose their licence for anything they did.

“It was a very cosy relationship. I’ve to be very honest in saying I would always believe that when we were meeting with them it was done in a very deferential respectful way. However, at the end of the meeting, you went away and did your own thing.

“The sanction of losing your licence — which is the ultimate — didn’t exist.”

Mr Somers said the expression used to describe the type of regulation was “light touch”. “That’s precisely what it was, but it was a respectful relationship,” he said.

Mr Somers, who worked for a time in Australia, said looking back the working environment for banks in Ireland was less severe. “I’ll admit it, it was a very comfortable environment,” he said, although he dismissed the suggestion of a “golfing dinner” type of relationship with the regulator.

“Genuinely no, they would come to our office, we would go to theirs. When the annual results came out the chief financial officer and myself would go down, we’d go through the results, explain what we’d done and, invariably, we would get complimented on what we had done and we left.”

Mr Somers said an open comparison would be made between their results and those of Anglo Irish Bank.

The question often was “you’re not growing quite as fast as Anglo, they would seem to have a different formula”.

He said their growth figures would be in the region of seven, eight, 10% per annum and that Anglo was growing at 30%.

“And you have a discussion about it, but I’m saying it was more in passing than a concentrated thing, specifically, what are they doing that we’re not doing, and all I could ever say to anybody when we had that discussion was that they could make their decisions much faster than we could.”