Political frustration as probe fails to bring bankers to justice
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Irish finance Minister Brian Lenihan has expressed frustration that a year after the emergence of banking scandals that rocked the nation’s economy and left taxpayers with a bill for billions of euros in bail-out funds, not a single banker has been prosecuted.
He says: “I am as frustrated as every citizen in this country that we are not seeing bankers in jail yet. A huge investigation is underway. Hundreds of statements have been taken and there is cooperation with the UK authorities. We need results.”
He has been challenged by Labour Party leader Eamon Gilmore over the delay in bringing a case against errant bankers.
Gilmore points out that the scandals at the now-nationalised Anglo Irish Bank emerged at the same time as crooked financier Bernie Madoff was arrested in New York. Madoff has since been jailed for 150 years while not one Irish prosecution has reached the courts.
Anglo Irish, which is covered by a €400bn state guarantee, has also cost taxpayers €3.8bn in recapitalisation, with further billions likely to be required.
In a series of raids on the bank as part of investigations by the Irish Fraud Squad and the director of corporate enforcement, more than two million documents have been seized.
Investigations are focussed on loans adding up to €122m to the bank’s former chairman Sean Fitzpatrick over an eight-year period. These loans were not disclosed to shareholders.
They also cover the movement of €7.45bn in deposits between the bank and Irish Life & Permanent, which were used to bolster Anglo Irish’s financial position.
A loan of €450m to a so-called golden circle of investors which was used to buy shares in the bank to maintain its market price is also being looked into.
Two developments have prompted calls for investigations to be speeded up. One is a report that Fitzpatrick, whose investments have been hit by the downturn, has stopped paying interest on his once-secret loan as he can no longer afford to meet the monthly bill of almost €400,000.
Second, the Serious Fraud Office in the UK has launched an investigation into transactions that occurred at the London office of Anglo Irish before the bank was nationalised earlier this year.
It is not clear at this stage which transactions are being looked in-to although Lenihan has been briefed, according to his officials.
But the minister has rejected calls to intervene to fast-track the Irish investigation so as to bring about prosecutions.
He says: “I cannot interfere in the prosecution process any more than I can ring up a local police station and tell them what they should do.”
Dare to be unpopular, Turner urges European policymakers
High quality risk analysis and politicians taking warnings seriously are top of Financial Services Authority chairman Lord Adair Turner’s list of how European regulators can better work together.
The European Union has agreed big changes to the structure of regulatory and supervisory cooperation to introduce greater coordination between regulators. But speaking at a City of London Corporation reception in Brussels recently Turner warned that success depends on a range of factors.
He says a priority is the ability of the proposed European Systemic Risk Board to develop good quality risk analysis and the willingness of politicians to take its warning seriously and countenance potential unpopularity.
Turner is also calling for a commonly agreed and enforced rule book that features a balance between political oversight and delegation to technical experts.
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