Ireland way off ensuring banks operate within rules

More than 130, or one in 12, state-paid staff in the Central Bank got salaries of more than €100,000 last year. You’d really wonder why if you were listening to the Oireachtas finance committee yesterday.

Central Bank governor Philip Lane was explaining to TDs and senators what actions were taken against lenders for overcharging mortgage customers. Thousands were wrongly moved onto more expensive deals.

It was put to Mr Lane again and again that the Central Bank’s role was a supervisory one, paid by taxpayers, to protect customers and impose sanctions where lenders act wrongly.

It has now emerged that as many as 15,000 bank customers may have been overcharged as they were denied tracker mortgages.

Mr Lane was unable, or some suggested, unwilling to give Oireachtas members exact figures on the numbers overcharged for mortgages. Furthermore, little was explained about what banks did or were doing to compensate customers. TDs were incensed and filleted the bank chief.

Mr Lane could not say how many banks had given assessments on overcharging; he could not say exactly when the bank’s review of cases would be completed; he could not quantify the scale of the mortgage overcharging; he could not specify if banks wronged customers by miscommunicating about fixed rate mortgages or denying them a rate change.

Fianna Fáil’s Michael McGrath queried why the Central Bank was quoting 8,200 cases when the real number — from the banks — was closer to 15,000. Only later did the bank chief concede this was correct.

Committee chairman John McGuinness said people have lost homes and some have committed suicide because of the stress. The lack of information is “striking”, declared Mr McGuinness.

“Are you being bullied by the bank,” he asked, to which the governor denied this was the case. “I would conclude that you are afraid of the banks... remember the customers that you are supposed to be protecting,”said Mr McGuinness.

Mr Lane said there are limits to what could be said, given ongoing inquiries into the overcharging. Lenders now face intrusive regulations, he claims.

This wasn’t enough. The committee meeting was temporarily suspended, to give the governor and his team time to get their facts and figures straight.

Yesterday’s committee hearing that Ireland is a long way off ensuring banks operate within the rules. Their greed and unorthodox methods helped bring about this country’s ruin during the crash.

Down in Dublin’s docklands, the final touches are being put to the Central Bank’s new HQ. Some say the pale bronze or gold flakes on the exterior of the former Anglo Irish Bank building almost mirror Trump Tower.

Surely it is about time the bank regulator also started enforcing gold standards with reckless lenders.

Editorial:

Business: 16


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