Nyberg: Anglo lenders 'ignored loan policy rules'

A study into the banking crisis by Finnish expert Peter Nyberg has found that lenders at Anglo Irish Bank "commonly ignored their own rules" on loan policy.

Mr Nyberg's review of nationalised Anglo Irish Bank and Irish Nationwide Building Society shows two finance houses run under lax controls.

Anglo – which is costing Irish citizens about €30bn - had deficient risk management and lenders at the bank commonly ignored their own rules on loan policy.

Irish Nationwide – which is costing €5.4bn – had a sub-standard lending wing with files often badly maintained and deals not reviewed.

Even its IT department lacked the necessary knowledge and skills.

“Contrary to public perception at the time, lending at Anglo and INBS had proceeded with insufficient checks and balances during the period,” the report said.

Mr Nyberg found that the Financial Regulator Patrick Neary hesitated over whether to come down hard on the two lenders after problems were identified.

“Had the Financial Regulator rigorously enforced its recommendations to improve structures and process, it is possible that Anglo would have grown its property lending in a more prudent manner,” the report stated.

“Moreover, determined public action by the Financial Regulator early in the period could possibly have meant that other banks’ prudential standards would not have deteriorated to such an extent over the period.”