Investigator examining huge volume of bank data

THE FORMER Finnish senior civil servant leading the commission of investigation into the banking crisis has sought a vast amount of information from the banks, including the minutes of board meetings dating back to 2003.

Peter Nyberg, whose appointment to lead the commission was confirmed last week, has met executives at Bank of Ireland, Anglo Irish Bank and Irish Nationwide Building Society to outline the detailed files sought in the inquiry.

AIB is expected to meet the investigative team shortly.

Meetings with Irish Life & Permanent and EBS are also taking place.

The banks are setting up so- called “datarooms” where Mr Nyberg’s team can assess internal bank documents outlining the management, credit and risk policies pursued by the six Government-guaranteed domestic institutions that led to the banking crisis.

Mr Nyberg is investigating whether the banks breached lending policies and limits set both by the institutions themselves and the Financial Regulator. He will also examine the governance followed by the banks.

Investigators will seek records showing a sample of loans to the largest borrowers and the heavy concentration of the loans to the property sector as well as details of the banks’ business models.

Among the team of bankers assisting Mr Nyberg is former head of Belgian-owned Irish mortgage lender KBC Homeloans Tom Foley and one-time head of AIB’s branch network, Pat O’Mahony.

Mr Foley, who sits on the Government group reviewing measures to help heavily indebted mortgage holders, left KBC last year.

Mr O’Mahony left AIB in 1996 to develop property in the tourism industry in Mayo, Kerry, Wicklow and Wexford over recent years.

Due to the huge volume of material that is being sought, sources with knowledge of the investigative team’s work schedule have questioned its ability to assess all material sought within the commission’s six-month timeframe.

Preparatory work has been carried out by Mr Nyberg’s team in recent months but the investigation has only began meeting bank executives in recent days.

The investigating commission is carrying out its work on a confidential basis and is not making any public comment within the six-month period.

Mr Nyberg is working under a €1.8 million budget and must report to the Minister for Finance Brian Lenihan by next March.

He is examining six institutions – AIB, Bank of Ireland, Anglo, Irish Life & Permanent, Irish Nationwide and EBS – over the period from the start of 2003 to January 15th, 2009, the day Anglo was taken into State ownership.

The investigation was originally due to end on the night of the Government bank guarantee, September 29th-30th, 2008.

However, the Minister later amended the commission’s terms of reference and he extended the timeframe to include events leading up to the nationalisation of Anglo.

Mr Lenihan has asked Mr Nyberg’s team to examine the serious governance and risk management failures at Anglo and Irish Nationwide and “more deeply and broadly” to examine what went wrong in both organisations.

Investigators will sift through the material received from the banks over the coming months and will rely heavily on the records before reporting to the Minister.

Mr Nyberg will base his investigative work on two reports into the crisis which were published earlier this year – the first by Central Bank governor Patrick Honohan and the second by international banking experts, Klaus Regling and Max Watson.