Central Bank inquiry into Irish Nationwide
THE Central Bank is set to hold an inquiry into the Irish Nationwide Building Society after discovering possible regulatory breaches.
Following an initial investigation, the bank has decided there was sufficient evidence to warrant an inquiry into the alleged breaches and evidence to suspect certain INBS senior management may have taken part in the alleged violations.
In a statement, the Central Bank said it ‘has reasonable grounds to suspect that Irish Nationwide Building Society has committed certain prescribed contraventions and that certain persons who were concerned in the management of INBS at the relevant time participated in the commission of those suspected prescribed contraventions’.
Under its administrative sanctions procedure, the Central Bank can levy fines of up to €10million on an institution and €1million on individuals found to have been involved in breaches. The regulator has not named the former executives who will be the subject of the inquiry.
An inquiry is now expected take place to examine the allegations.
The panel will be chaired by solicitor Marian Shanley. Barrister and accountant Ciara McGoldrick and former chief executive of Lloyds TSB, Geoffrey McEnery, will also be on the panel. Ms Shanley was a Law Reform Commissioner from 2002 to 2012. At present she is registrar to the Fennelly Commission into the recording of phonecalls at Garda stations.
The purpose of the Central Bank inquiry is to determine if the now-defunct INBS committed the suggested violations and to determine if any of the management involved participated in the alleged breaches and if so to determine any sanctions.
The lender was nationalised in 2010 after receiving a €5.4billion bailout. Its branch operation was closed by the State and it was folded into Irish Bank Resolution Corporation in 2011, alongside with Anglo Irish Bank, for wind down. IBRC was liquidated by the State in February 2013.
Controversy has previously surrounded the tenure of the former chief executive Michael Fingleton, who ran Irish Nationwide from the Seventies until 2009 when it was bailed out.
Mr Fingleton, nicknamed Fingers, was controversially paid a €1million bonus by Irish Nationwide in November 2008, two months after the State’s blanket bank guarantee was issued. Irish Nationwide posted a €2.5billion loss in 2009, having written down a third of its loan book over the space of two years.
Mr Fingleton has rarely spoken out about his time at the helm of the banks, but he commented during an employment appeals hearing in 2011 when he was asked whether he ran INBS as a ‘personal bank’.
He said: ‘I wish to refute in the strongest possible terms claims I ran it as a personal bank. That is an absolute slander and totally untrue. I ran the society in the best possible manner.’
Mr Fingleton has since been directed to appear before the Oireachtas Banking Inquiry on September 2.
The committee has also pencilled in appearances by the defunct lender’s former chairman Michael Walsh, and its former director John Stanley Purcell.