Banking report criticises 'relaxed attitude' of financial authorities

Financial authorities had enough information to be suspicious about the property boom but did not understand it or could not foresee the damage, a report has found.

A study into the banking crisis by Finnish expert Peter Nyberg has found that the risks went undetected or were at least seriously misjudged.

The 156-page report branded their actions and warnings modest and insufficient.

Mr Nyberg found that the regulators and Central Bank also had information that would have raised concerns about trends in the financial markets.

"The relaxed attitude of the authorities was therefore the result of either a failure to understand the data or not being able to evaluate and analyse the implications," the report stated.

Finance Minister Michael Noonan said the report required careful consideration.

"It represents a thoughtful and multi-faceted analysis into the causes of the banking crisis in Ireland and bears careful and measured consideration by all concerned," the minister said.

The report - 'Misjudging Risk: Causes Of The Systemic Banking Crisis In Ireland' - found that Financial Regulator Patrick Neary chose to trust bank chiefs to make proper and prudent decisions.

It warned that when problems were identified, the watchdog did not ensure sufficient corrective action was taken.

Full report to follow.