Anti-poverty groups hit out over plans to reinstate bank bonuses

Plans by the Central Bank to reinstate bonuses and pay rises for high-earning officials are an insult to people struggling to survive post-recession Ireland, anti-poverty groups have said.

St Vincent de Paul and Social Justice Ireland issued the warning after the Irish Examiner yesterday revealed that the move is being considered for as early as 2015.

Under plans confirmed by the financial institution, “an examination of potential reward models for the future” is being scheduled as part of wider structural changes to the Central Bank.

The “reward models” will involve the possibility of pay rises and bonuses for the group’s 1,400-strong workforce — including a number of high-ranking officials whose salaries already exceed the Government’s €200,000 public sector pay cap.

The review began in upcoming weeks and will be completed in early 2015, leaving open the possibility of the return of financial perks to the public body.

However, hitting out at the move, anti-poverty groups warned that those set to receive the planned extra funds have no right to benefit financially until the people worst affected by the recession recover.

“High earners in the Central Bank are part of the richest 10% of people in the country. People who lost the most since 2008 are the poorest 10%,” said Social Justice Ireland director Fr Sean Healy.

“So we object completely to this process.

“I would say very strongly that the gap between the richest and poorest in our society has widened significantly in recent years.

“An august institution such as the Central Bank should be setting a good example for society, not making a decision that will hurt Ireland’s poor.”

Fr Healy’s position was echoed by St Vincent de Paul spokesman Jim Walsh, who warned that people badly damaged by the recession will not accept the return of bonuses in the banking sector.

“People who have to seek supports from society will find it very difficult to understand this,” said Mr Walsh. “As far as St Vincent de Paul is concerned, we are still dealing with a lot of people who have been left behind by any alleged recovery.

“The numbers looking for help are still consistent with the last few years.

“My understanding is the Government has no control over people’s salaries in the Central Bank, but now is not the right time for the Central Bank to even consider bonuses or pay rises.”

Extra payments for high-earning bankers are seen by many as a touchstone for the excessive side of the Celtic Tiger era, with the amount of money financial institutions pay senior officials still under intense scrutiny more than have a decade since the economic crash.

Central Bank figures show a number of its top-level officials currently earn salaries above the Government’s €200,000 public sector pay cap.

They include Central Bank governor Patrick Honohan, who receives €213,000 a year, deputy governor Stefan Gerlach (€250,000), and financial regulator Cyril Roux, who receives €310,000 a year.