Fine Gael today demanded the board of the Financial Regulator resign in a bid to boost confidence in the country’s beleaguered banking system.
Party leader Enda Kenny said there was a growing sense that the Regulator’s office was aware of and had turned a blind eye to the transfer of money between Irish Life & Permanent and scandal-hit Anglo Irish Bank.
The regulator has already branded the multi-million euro payments unacceptable, and also denied separate reports that it knew of a so called ’sweetheart deal’ relating to the purchase of Anglo shares last summer.
But Mr Kenny said trust in the country’s banking sector had been destroyed both at home and abroad.
“That is because of reckless banking practices, ineffective regulatory oversight and basic political incompetence at Governmental level,” he said.
“There is a growing perception that the Financial Regulator was aware of, and turned a blind eye to, the presentation of deceitful accounts by Anglo on foot of transfers from Irish Life & Permanent last year.”
The transactions between IL&P and Anglo were identified by PricewaterhouseCoopers after it inspected banks involved in the Government’s deposit guarantee scheme last October.
Finance Minister Brian Lenihan admitted he did not read the auditors’ full report and only became aware of the scale of the payments in January.
“Last week in the Dáil I said that the Minister for Finance should resign when he revealed that he hadn’t read the PricewaterhouseCoopers report and displayed a level of incompetence that only feeds the lack of trust in our response to this crisis,” Mr Kenny added.
“Faced with a crying need to restore that confidence to our system, and not because of any one individual’s wrongdoings, I believe the Board of the Regulator and senior management should resign in light of their collective failure to deal correctly with these issues.”
Three top executives have resigned from the IL&P board over the payments controversy, including chief executive Denis Casey, group finance director Peter Fitzpatrick and head of group treasury David Gantly.
The executive trio have taken the fall over the €8.2bn in highly irregular deposits paid into the now nationalised Anglo in a so-called “bed and breakfast” scheme temporarily boosting the rival’s books.
Regulator investigators are trawling the books of both institutions to uncover the full details behind the money movements.
The multi-billion euro lodgements further tarnished the already crisis-hit Irish banking sector with politicians and experts talking of “cosy cartels” and “golden circles” in the once proud Dublin finance sector.
Outgoing financial regulator Patrick Neary already resigned in December in the wake of the Sean Fitzpatrick Anglo loans fiasco, insisting he was not told for nearly a year about the secret deals.
The Financial Regulator today also denied reports that it knew the identities or the financing arrangements of a so called ’golden circle’ of ten investors assembled to buy a stake in troubled Anglo Irish Bank last summer.
Meanwhile Mr Kenny said Fine Gael would shortly publish a review of the National Development Plan that would prioritise job protection.