Bankers involved in tax evasion still work in sector

The financial regulator is investigating a small number of former National Irish Bank (NIB) executives who were implicated in tax evasion and overcharging but continue to work in financial services.

Dr Liam O'Reilly, chief executive of the Irish Financial Services Regulatory Authority (IFSRA), yesterday told an Oireachtas committee that the regulator was "actively involved" in assessing the positions of the individuals.

He said: "The financial regulator in the past has dealt with persons that were not proper by confirming they have resigned, removing them from the industry or denying them entry to the industry in the first place."

He also outlined IFSRA's plan to test the "fitness and probity" of about 10,000 directors and managers in Irish financial services firms.

This test could involve the regulator approaching the Revenue Commissioners to check on the tax compliance of a particular individual. The regulator will be able to disqualify people from holding senior posts if "proven serious misbehaviour" is found.

None of the 19 executives named by the High Court Inspectors' report into NIB last July will be able to take up such a position in future without a "thorough assessment as to their competence and integrity", Dr O'Reilly added.

He declined to specify how many former NIB executives continue to work in financial services, but he confirmed that the "vast majority" have left the industry, or are in the process of doing so.

Some, such as Mayo TD Ms Beverley Flynn, exited the industry during the 1990s.

IFSRA is working with company law watchdog, the Office of the Director of Corporate Enforcement, on the investigation, Dr O'Reilly said.

The regulator is also liaising with the individuals themselves and with their employers.

All of the 19 people named by the High Court Inspectors' report into NIB last summer have left the bank.

IFSRA declined to be exact about how many of the former NIB executives concerned continue to work in the industry but it is thought to be fewer than five individuals across a number of institutions.

Dr O'Reilly told the Joint Committee on Finance and the Public Service that the fitness and probity issues arising from the NIB report have given the regulator "serious concern".

He said there was a "lack of consciousness" of the importance of operational risk within the financial industry in decades past.

"This is a weakness we have found generally in the system," he said, suggesting that training structures had historically been ineffective.

IFSRA is also overseeing in a disciplinary investigation of AIB employees found to have been involved in either overcharging or breaches of tax law.

Dr O'Reilly said the investigation was not simply concentrating on "junior staff" at the bank.