BANKING Rottweiler Liam O’Reilly still doesn’t trust the banking sector not to get up to mischief again. “There’s an old saying. Trust . . . and verify,” he smiles.
The above quote is from an interview with the Financial Regulator’s chief executive, Liam O’Reilly in last Sunday’s Independent .
Anyone unfamiliar with the fact that Ireland is a corrupt state might get the impression that O’Reilly is an Eliot Ness type figure relentlessly pursuing the corrupt and protecting the interests of honest citizens.
An analysis of the article will clear up any such misconceptions.
AIB will have more reason than most to cheer O’Reilly’s impending retirement from the Financial Regulator’s office, having been hit for €34m after the forex rip off
AIB were not hit for €34m. They were not hit for anything. The €34m in question was the amount they stole from their customers and that’s all they were required to pay back.
At the time the Financial regulator did not have the power (even if it wanted to) to impose any punishment on AIB because the civil servants who established the organisation did not provide for any such power. This is like a car manufacturer designing a car with no petrol tank â€“ in other words, gross incompetence.
There was always a very clear determination by (AIB chairman) Dermot Gleeson and the board to sort it out. It’s not to say that in this room that there weren’t some very hard and tough conversations. But it was always businesslike. It was never personal,” he says. “A bit like the mafia.
Unwittingly, O’Reilly hits the nail on the head here. ‘A bit like the Mafia’ Can you imagine the Securities Exchange Commission (SEC) the American equivalent of our Financial Regulator, inviting Enron into the office to “sort out” allegations of very serious corruption? All done in private with no police involvement.
In the US, the police and SEC were involved from the start. Everything was done in public and through the courts, in other words justice was seen to be done. Our Financial Regulator operates, for the most part, in secrecy. This policy benefits the corrupt and damages the interests of ordinary citizens.
On the Cologne Re corruption, O’Reilly is quoted as follows.
“We were on top of that from day one…”We were quietly moving on it.’
Quietly is the operative word here. The Australians and the Americans immediately initiated legal action, keeping their public (customers) fully informed of events while our Financial Regulator kept things quiet preferring to merely “monitor” the situation. This is despite the fact that the corruption originated in Dublin’s IFSC centre. No wonder the New York Times labeled the IFSC “the financial wild west”.
‘Up until May of this year the regulator had secured over €69m in refunds for consumers’
‘In refunds’?? The consumer, somehow, is supposed to be grateful that the regulator managed to get refunds for stolen money. No fines, no police involvement, just quietly refund the stolen money.
‘Some 32 institutions have been nailed for 259 cases of overcharging since May 2004.’
What does O’Reilly mean by “nailed’?? None of these institutions were punished in any way whatsoever for their corruption. All of them are protected by the regulator through a policy of secrecy. This secrecy puts the ordinary citizen at a serious disadvantage in that he is unaware that he may be dealing with an organisation that has a record of stealing from its customers.
‘Perhaps AIB won’t be the only bank who’ll be happy to see the sheriff leave town.’
AIB were never afraid of O’Reilly nor do they care who replaces him. They are safe in the knowledge that his successor will maintain the policies that have always protected the financial institutions at the expense of ordinary citizens.
That’s how things are done in the financial ‘wild west’ sector in Ireland