Quinn Group - ‘Light touch’ regulation was madness

THERE are layers of bitter irony behind Ireland’s most toxic bank’s move to sell the empire created by a self-made businessman who became the country’s richest man only to fall victim to greed and over-weaning ambition.

It is a salutary tale of our times. Having amassed a vast fortune, Seán Quinn must endure the ignominy of seeing Anglo Irish Bank, the villain behind the state’s financial collapse, become involved in the imminent takeover of Quinn Insurance.

In its new form, Anglo has also appointed a receiver with the aim of recouping every last cent from Quinn-owned cement and glass manufacturing and other interests. With the group effectively owned by Anglo, Seán Quinn and his family are removed from any involvement in the companies that bear their name.

To paraphrase an old saying, the more you owe the less likely are the banks to collect. That is certainly true in the Quinn case. Shorn of its wealth, the family owes Anglo a staggering €2.88 billion. Billion has become a figure of everyday speech but the sum involved is beyond imagining. So enormous is it, the debt will probably be written off — cold comfort for tens of thousands of mortgage holders and others who owe far less but are being squeezed mercilessly by their banks.

Ironically, hard-pressed taxpayers may yet be beneficiaries of the latest developments. With the Quinn Group owing €1.28 billion to various banks and bondholders, the hope is that selling its assets will compensate somewhat for the endless sums of money being poured by every household in the state into the black hole left by the reckless actions of those who mismanaged the rogue bank.

Another positive twist to this saga is that 1,570 employees at Quinn Insurance in Ireland are expected to keep their jobs, at least for now, as the group looks set to be taken over by preferred bidder, US-based Liberty Mutual, with Anglo Irish Bank a minority shareholder.

On a personal level, there will be sympathy for Seán Quinn, especially in border areas where he createdbadly needed employment. But lessons must be learned.

Essentially, he lost the run of himself and has nobody else to blame for the manner in which shares were amassed in Anglo Irish, a misadventure of disastrous proportions motivated by avarice. The ironies of the Quinn scenario underline the irresponsible thinking behind the policy of “light touch” regulation encouraged by successive Fianna Fáil-led governments in financial institutions whose actions were evil, if not downright criminal.

In any other country in the world those at the top would be in jail. As for the ideology of greed peddled by political parties, an elite group certainly got rich. But the money did not trickle down to the plain people of Ireland who are now bailing out the banks.

On a day that marks the end of the road for a man who was once the richest in the country, and with a receiver also appointed to assets owned by property developer Derek Quinlan, it is timely to reflect on the sheer folly of “light touch” regulation. It has brought the nation to the point where more than 80% of credit union members surveyed live with the fear that they could not respond financially to a crisis in the home.

Never again must such madness go unchecked.