Settlement agreement with INBS will only reinforce cynicism

Public cynicism about the effectiveness of financial regulation in this State will hardly have been helped by the Central Bank’s “settlement agreement” with Irish Nationwide Building Society, announced yesterday.

INBS, you’ll recall, went wallop after the financial crash in late 2008 and required a €5.4 billion bailout before being consigned to history.

The Central Bank’s investigation began in 2010, but the €5 million fine issued for the regulatory breaches is entirely meaningless as INBS does not have any assets.

INBS admitted to breaching financial services law and regulation, including persistent failure to comply with its own internal policies and procedures.

The investigation was the most extensive in the history of the regulator, involving hundreds of thousands of documents. It related to INBS and executives who were involved in its management between August 2004 and September 30th 2008, the day the Government’s blanket bank guarantee was announced.

It is investigating further a number of former executives of INBS and there could yet be a public inquiry into their activities. This is where the meat and drink might be had, so to speak.

The public would certainly welcome the opportunity to see INBS’s former chief executive Michael Fingleton and some of his colleagues put under the spotlight about the cavalier way they ran the building society before the crash.

There’s also the matter of the €1 million bonus paid to Fingleton in November 2008, two months after the guarantee.

The Central Bank said it would continue to use the “full extent” of its sanctions enforcement powers to hold those responsible to account.

We can but hope.