Finnish government official to lead banking investigation

 

Minister for Finance Brian Lenihan has appointed a former senior Finnish government official to lead the commission of investigation into the banking crisis.

The commission will examine corporate governance and risk management in each of the banks covered by the Government’s guarantee for the six-year period from January 2003 to January last year. The Government agreed last night to widen the terms of reference of the commission.

The time period under scrutiny will now extend up to January 2009, covering the phase which led to the Government’s decision to nationalise Anglo Irish Bank. The remit had been expected to end on September 30th, 2008, the day the bank guarantee was announced.

Mr Lenihan told the Dáil this morning that Peter Nyberg, former deputy director general for financial services in Finland’s ministry for finance, had agreed to lead the commission.

The Minister said Mr Nyberg “has all the necessary experience to undertake this important role. He will be supported by the expertise he requires and I have made provision in my department’s estimate for this year to cover the costs of the commission”, which is expected to run to €1.8 million.

Mr Lenihan also said the Oireachtas finance committee would finish its investigation into the banking crisis by the end of October and would report to the Dáil by November 4th.

But Fine Gael finance spokesman Michael Noonan said the committee would require “professional advice” and pointed out that the tender process for the appointment of advisors could be quite long.

He said that if the Minister started the tender process immediately it could be October before advisors were appointed and that could delay the work of the committee. Mr Noonan asked the Minister to take that under
consideration.

Mr Noonan also welcomed the amendments to the terms of reference of the investigation, including extending it to January 15th, 2009. "You’ve made a lot of serious concessions that will improve the work of the committee," he told Mr Lenihan.

Finland suffered similar economic problems among major lending institutions to Ireland in 1991. The collapse was largely put down to a combination of bad banking, lax regulation and poor market discipline.

In addition to serving at the Finnish finance ministry since 1998, Mr Nyber also worked as a senior economist at the International Monetary Fund with responsibility for analysis and forecasting for a number of European countries, including Germany, Austria and Switzerland.

He was also an advisor to the board at Bank of Finland, with responsibility for financial market stability issues, for banking crisis resolution proposals and preparations for Finland’s entry into the euro.