Whistleblower tip-offs in finance firms jump 40% - Central Bank

The Central Bank experienced a 40 per cent increase in tip-offs of suspected wrongdoing at financial firms from workers in the industry and the general public in the year to June, according to Ed Sibley, a deputy governor of the institution.

Some 165 protected disclosures were made to the Central Bank from whistleblowers during the period, up from 117 for the previous 12 months, Mr Sibley told a conference on Tuesday organised by the Money Advice and Budgeting Service (Mabs).

“The reports are taken very seriously, as is our commitment to protect the identity of the individual making the report,” he said. “We listen carefully and take action, including undertaking additional supervisory work, such as on-site inspections; requiring a firm to fix issues; putting firms under higher supervisory focus; and taking enforcement action.”

The Protected Disclosures Act 2014, which aims to protect people who raise concerns about wrongdoing in the workplace, requires public bodies to prepare and publish a report each year on the number of protected disclosures made to them.

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Mr Sibley also told the conference that mortgage arrears remained a "serious problem" in Ireland more than a decade after the financial crash and six years since non-performing loans peaked in Ireland.

Arrears drop

While the ratio of owner-occupier loans more than three months in arrears has fallen from 13 per cent in September 2013 to 6 per cent, or 43,000 individual mortgages, at the end of June, 27,000 such accounts remain more than two years behind in repayments.

Some 55 per cent of the distressed loans are held by banks, with the remainder split across retail credit firms and credit servicing firms.

“There is clearly a high level of personal distress for borrowers when they are in arrears, particularly as they go through legal proceedings. However, a functioning secured lending market has to have meaning to that security,” Mr Sibley said. “There are costs to all other borrowers through the impact on secured lending pricing together with financial stability risks where this security is undermined.”

The deputy governor said this was reflected in the fact that Irish banks have to hold considerably more expensive capital for mortgage lending than many European peers.

“It is also why the higher interest rates and net interest margins in the euro zone are typically, albeit not exclusively, found in the countries with higher levels of non-performing loans,” he said.

The average rate on new mortgages in Ireland stood at 2.99 per cent in August, more than double the euro zone average, according to Central Bank data.