Toothless IFSRA

During the 80s and 90s, Irish banks and other financial institutions robbed tens of millions from the State through DIRT, Ansbacher and other frauds. During this time the Dept. of Finance, various Ministers for Finance, the Central Bank and the Revenue Commissioners all knew about this theft but took no effective action.

When it all eventually came to light, the most common excuse was: “we were afraid that any action would lead to a flight of capital out of the country’. Since then, hundreds of millions have been spent investigating this corruption in never-ending tribunals, all paid for by the taxpayer. One would imagine that after all this; the so-called State regulatory bodies would have got their act together and financial institutions would be more than willing to co-operate in cleaning up their business.

Not so, apparently. The so-called Irish Financial Services Regulatory Authority (IFSRA) has timidly proposed some modest regulations to test the integrity and competence of senior personnel in the banking industry. The arrogant response by various financial institutions demonstrates that they have no fear of the Financial Regulator and are determined to maintain the freedom that almost total self-regulation affords them.

Some of the objections to the modest proposals include: Unduly burdensome, deterrent to recruitment of personnel, overly bureaucratic or damaging to Ireland’s attractiveness as a base for international financial services and, yes, you’ve guessed it, fear of a flight of capital from the country. So, what is involved in this proposed oppressive and despotic regime? Well, just three requirements:

1. Directors will have to disclose that they are tax compliant and provide a tax clearance certificate every year.
2. A person would be unsuitable as a director if they had dealings with a tribunal of inquiry
3. A director would have his/her suitability examined if they failed to manage finances.

Now the banking industry is constantly reminding us of how important they are, how crucial their industry is to the financial health of the country. The employment of thousands, financing of industry, provision of mortgages, they have even claimed that they created the Celtic Tiger. So what is the problem with meeting a few modest and reasonable conditions in order to qualify to work in an industry that is apparently of such crucial importance to the future of this great little nation?

The problem is of course, accountability. Our bankers are not used to answering to anyone other than themselves. On a practical level, there is no problem meeting the above requirements but on a psychological level, it is an impossibility. The very idea that the great and good of our banking sector would have to submit to regulation, no matter how minimal, is, for them, simply outrageous and unacceptable.

So, how will this be resolved? Well, judging by how things have always operated in the Banana Republic of Ireland, the following is likely. A deal will be struck that will save face for both parties. The so-called Financial Regulator will issue yet another glossy pamphlet trumpeting how it is protecting the interests of the consumer and the banks will continue to do what they do best, make massive profits within their own self-governing financial republic where they are untouchable.

Guess who loses out?