Bank scandals 'risk Ireland's financial credibility'

Scandals involving two of Ireland’s major banks have jeopardised the financial industry’s international credibility, Taoiseach Bertie Ahern warned today.

The Taoiseach said: “It can’t get much worse, just about everything that has come out has been disturbing, upsetting. We can’t be complacent about these issue.

“These issues are breaking our tax laws, they are not doing any good to our image. We have a good financial services image in Ireland, we have to keep that, we have to uphold that.

“We can’t in any way be ambivalent about what is happening. These are very serious matters, they have to be fully investigated.”

Mr Ahern said the scandals involved a minority of people in authority who abused their positions and damaged the country’s reputation.

He said: “A few people who want to put jam and cream on their own cake affect that and we can’t tolerate that.

“We can’t in any way be complacent about it, we have to be firm we have to be tough.”

“It must be absolutely perfect, it must be pristine clean and clear and there are problems there and we have to rectify them. We have to get it right and we’ll do that.”

The financial sector has been in turmoil with several scandals threatening the international reputation and credibility of the industry.

Earlier this month Allied Irish Bank admitted overcharging foreign exchange customers

And in a second overcharging scandal it emerged more than 500 customers were being charged for mortgage insurance without their consent.

It was estimated that AIB earned in the region of €20m through overcharging at the foreign exchange desk.

The overcharging was reportedly going on for some 10 years.

The chief executive of Bank of Ireland resigned yesterday after admitting accessing internet sites with pornographic links.

In a statement Michael Soden, a 57-year-old Dubliner with considerable experience in international finance, said he was quitting his post after using websites forbidden under the bank policy.

Mr Soden was named as chief executive of the Bank of Ireland in September 2001.

He replaced Maurice Keane in March 2002 and had previously been the executive general manager of global business and personal finance at the National Australia Bank in Melbourne.

Sinn Féin President Gerry Adams said naming culprits of banking scandals was not enough and that the lack of arrests was totally inadequate.

“Naming the alleged culprits is not enough. If there is evidence of wrong-doing, arrests should be made,” the Sinn Fein leader said.

He said action was needed to halt white collar crime and claimed the scandals involved a “golden circle” who thought they were above the law.

Mr Adams said: “Little wonder that there is increasing disillusionment with politicians and institutions.

“There are two laws. One for the rich and another for the rest of us.

“Is this what Minister McDowell meant when he said inequality is an incentive for the economy?”

The Green Party’s Dan Boyle called on Finance Minister Charlie McCreevy to set up a Commission on Banking .

Mr Boyle said a commission would create and enforce standards in the country’s banks.

“What recent scandals reveal has been the utter ineffectiveness of banking regulation in Ireland.

“Now is the time to finally put in place the standards that would help to establish proper levels of consumer trust and international confidence in Irish financial services,” he added.