Commission ‘not responsible’ for Irish crash

The European Commission’s chief banking regulator has insisted the pan-continental group was not responsible for Ireland’s economic crash, saying it is not its job to ensure governments implement the body’s regulation guidelines.

Mario Nava, the commission’s director for regulation and supervision of financial institutions, and a key official in ensuring economic stability across Europe, issued the denial despite admitting pre-2007 EC protections were sub-standard and failed to protect vulnerable taxpayers.

Speaking during the latest cross-party Oireachtas banking inquiry meeting, the Italian-born expert said the EC has a role in injecting capital into banks and in ensuring suspect behaviour is found out before it is too late.

However, he insisted the group’s responsibility ended as being the “guardian” of international treaties, with legislation reflecting these measures then up to individual countries’ governments.

“Once the law is there we are not the supervisor.

“We are the guardian of the treaty, but not the regulation,” Mr Nava said when questioned by Sinn Féin and Fianna Fáil’s finance spokespeople Pearse Doherty and Michael McGrath.

“I’m not here to accept responsibility. I’m a witness here,” he added.

After being prevented by the inquiry’s chairman, Mr Lynch, from asking Mr Nava if this means the group will “wash your hands” of serious gaps if they are a country-specific regulation problem, Mr Doherty questioned Mr Nava again about whether the group has “no other involvement” in enforcing regulation, which he confirmed.

During the same meeting, Mr Nava told Fine Gael TD Eoghan Murphy that Ireland’s regulatory structures met continental guidelines even as the economic crash was unfolding.

However, answering further questions from Labour senator Susan O’Keeffe about “how confident” he felt in hindsight that the correct regulations were in place at the time on a scale of one to 10, he said it would be “three”.

“We found we had many things to do. It was not by chance we have put in 41 pieces of legislation in five years. At a global level there was an acceptance more needed to be done,” he said.

Mr Nava, who was told by Fine Gael TD Kieran O’Donnell it is not good enough to describe regulation development as “trial and error” because people have suffered the consequences of inaction, insisted significant improvements have been made.

However, he confirmed that currently the single resolution fund — set up to be a safety net for individual banks if they go bust — is short of its €55bn target, and admitted despite the scandals of recent years, the commission is not planning new guidelines to personally fine or jail top bankers for illegal activity, instead of attacking their institutions, as part of moves to discourage a repeat of the crash.

According to Socialist TD and inquiry member Joe Higgins, more than €180bn in fines have been levied against financial institutions in the US, Britain, and Eur-opean Union since the worldwide economic crisis began in 2008.