Ex-financial watchdog to appear before Irish Nationwide inquiry

Inquiry told regulator not keen on Fingleton resignation as ex-INBS chief ‘a font of knowledge’

The inquiry was told former INBS chief Michael Fingleton “was a font of knowledge”. Photograph: Dara Mac Donaill/The Irish Times

The inquiry was told former INBS chief Michael Fingleton “was a font of knowledge”. Photograph: Dara Mac Donaill/The Irish Times

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A former financial regulator has agreed to appear before the ongoing inquiry into the now-defunct Irish Nationwide Building Society (INBS).

Con Horan was due to appear on Monday, but failed to show due to a holiday. He has now agreed to attend as a witness on May 23rd and 24th, the inquiry was told on Wednesday.

Mr Horan’s solicitor had informed the Central Bank’s regulatory decisions unit, which is providing administrative support to the inquiry, last October that the potential witness was not amenable to a subpoena from a different jurisdiction to give evidence in Dublin. Mr Horan is on the staff of the European Banking Authority which is based in London and claims he is resident there.

Con Horan, a former financial regulator. Photograph: The Irish Times
Con Horan, a former financial regulator. Photograph: The Irish Times

The legal representative said the outcome of Mr Horan’s earlier co-operation with previous inquiries concerning the banking crisis and legal cases had been a “negative” experience.

The announcement that Mr Horan would attend came before Patrick Neary, the former chief executive of the now-defunct Irish Financial Services Regulatory Authority, gave evidence for a second day on Wednesday.

Mr Neary was being cross-examined by ex-INBS chief executive Michael Fingleton and the bulk of his evidence was on corporate governance practices at the failed building society.

Mr Neary was questioned about Mr Fingleton’s perceived “dominance” over the society. “I can’t deny the fact there was a perception that you were a dominant individual. That perception is out there and I don’t know if it was ever addressed,” he replied.

Former chief executive of the now-defunct Irish Financial Services Regulatory Authority Pat Neary had “no recollection of any member of the board” saying Michael Fingleton exercised a “dominant influence”. Photograph: Dara Mac Dónaill
Former chief executive of the now-defunct Irish Financial Services Regulatory Authority Pat Neary had “no recollection of any member of the board” saying Michael Fingleton exercised a “dominant influence”. Photograph: Dara Mac Dónaill

However, Mr Neary also noted that Mr Fingleton was an important part of the society and recounted that the regulator didn’t want to see him leave the institution when he had proposed to resign just before the financial crash.

“When it came to Mr Fingleton’s resignation, we didn’t want to see him going at that stage because he was a font of knowledge.”

Although the perception of Mr Fingleton’s control over the society existed, Mr Neary said he had “no recollection of any member of the board saying Mr Fingleton exercised a dominant influence”.

The pair also discussed corporate governance at the time of the proposed sale of INBS in 2008. Mr Fingleton said the society was having difficulty recruiting suitable personnel to join it at that time, including board directors.

“The general point of what Mr Fingleton was saying rings true. There probably would have been some reluctance by people to present themselves for election at an agm [annual general meeting],” said Mr Neary.

The inquiry, which was established on foot of a Central Bank decision in 2015 – public hearings began in December – is seeking to find out if Mr Fingleton and three other former managers were involved in seven so-called contraventions at the building society between August 2004 and September 2008.

The first module of the inquiry is looking at whether the society’s credit committee failed to adhere to internal policies by not reviewing cases of large commercial loan arrears, exposure to specific sectors or customers, or issues raised by internal audit, outside advisers or regulators.

Mr Fingleton is one of four individuals subject of the inquiry. The others are former INBS finance director John Stanley Purcell, one-time commercial lending manager Tom McMenamin and Gary McCollum, who once led the society’s UK lending activities from Belfast. The collapse of the society cost the taxpayer €5.4 billion.

The inquiry has been adjourned until Monday when Michael Walsh, the former chairman of INBS, will give evidence.

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