Independent forum on banking sought by IBOA

The head of the bank officials' union, Mr Larry Broderick, has said he was shocked by the latest revelations from AIB and seriously concerned at the impact it would have on his members' jobs and security, writes Jane O'Sullivan, Markets Correspondent.

"Recent revelations in AIB, viewed against the background of previous scandals with the banking industry, clearly demonstrates that the "culture" in Irish banking has to fundamentally change," said Mr Broderick, who is general secretary of the Irish Bank Officials' Association (IBOA).

He welcomed a statement from AIB chief executive Michael Buckley committing the bank to a review, with the IBOA, of the culture within AIB.

A meeting to this end will be arranged in the coming days, Mr Broderick said.

"If Irish banking is to regain credibility, a similar review must take place through the banking sector to ensure that the highest ethical standards are delivered and adhered to," he said.

He called on the Government to establish an independent forum on banking to review ethics in the sector in the interests of staff, consumers and the Irish economy.

However, the Irish Bankers' Federation (IBF) said the setting up of such a commission was premature. Instead, it wants to wait for the report by the regulator, IFSRA, which it said was just weeks from conclusion, and study it along with AIB's own internal report.

"IFSRA has extensive powers and we are confident the IFSRA investigation will get to the root of the matter," said Mr Pat Farrell, IBF chief executive.

While he conceded that revelations, such as those that have unfolded of late, diminished trust in the banking sector, he noted that studies showed that most customers were satisfied with their individual banking relationships.

Mr Farrell also believes the sector can emerge stronger from the current difficulties.

"It's a defining moment for banking," he says. "If the sector faces up to the issues and takes on board the lessons, we will have a stronger banking system as a result."

The IBF represents all of the major Irish banks and building societies.