Who would buy into our deeply flawed banks?

THERE is much derisory comment and punch about the reputation, probity and transparency of Ireland’s financial institutions and the inordinate levels of remuneration of those who lead them and those who are forced abruptly to retire from them.

If I was the chief investment officer of a significant fund I would never invest in a company where a transaction involving billions of euro could take place without the direct and conscious sanction, in advance, of the board of directors.

Their ignorance of such a transaction would reflect a grave and fundamental lacuna in corporate governance standards.

The deeply flawed reputation that this causes would also adversely impact the reputation and judgment of any potential investor.

If such titanic transactions can take place without their knowledge, how can a board and the company auditors genuinely safeguard the interests of shareholders and other stakeholders, especially when the beneficiary of the transaction, in the case of Anglo Irish Bank, is seriously compromised and lacking in transparency, credibility and candour for nearly a decade?

A common theme prevailing in many of the flawed institutions in Ireland — financial and ecclesiastical — is the absence of accountability, an inadequate validation of those whose standards are found wanting and the apparent absence of vital information by those in charge.

This makes their mandate as effective and secure as that of a fatigued and weary airline pilot attempting high altitude flying without adequate fuel.

The finessed response of the board of Irish Life & Permanent to the e7 billion lodged in Anglo Irish Bank is derisory and wholly inadequate.

In addition to the chief executive, I would have expected the immediate resignation of the chairperson, as well as the minnows directly involved — if not the entire board of that company. No company of stature would be associated with such a flawed transaction; hence presumably the secrecy, track-covering and intrigue.

It would also be interesting to know how much those who executed this transaction earned from it — or is that another secret hidden from the board and the shareholders?

I await, with interest, the observations of the Irish Association of Investment Managers and the Director of Corporate Enforcement on this entire matter.

It will be interesting to see what legal consequences ensue in the light of the last annual report of Anglo Irish Bank. The country clearly cannot afford to spend another e500 million on a prolonged and rambling tribunal of inquiry in its search for equity, justice and punishment.

Myles Duffy

Bellevue Ave

Glenageary

Co Dublin