Fingleton unaware that son sent e-mail soliciting new business
BANKING GUARANTEE:IRISH NATIONWIDE chief executive Michael Fingleton was unaware in advance that his son, an employee in the building society's London office, would be sending out an e-mail soliciting new deposits on the back of the State guarantee scheme.
The building society described the e-mail circulated by Michael Fingleton jnr after the announcement of the guarantee scheme as "inappropriate and regrettable in the circumstances".
The e-mail was sent to employees in a leading investment bank in London stating that, following the announcement of the Government's bank guarantee plan on Tuesday, Irish Nationwide "represented the safest place to deposit money in Europe".
Mr Fingleton jnr, who works in the society's Wigmore Street office in London, stated in his e-mail that the building society's six-month and one-year fixed-rate bonds were now very attractive.
"Money in these accounts are guaranteed regardless of the size of deposit and represent the best value in the UK market," he said.
The e-mail flies in the face of a statement by Minister for Finance Brian Lenihan to the Dáil on Wednesday that he was determined to ensure companies protected by the guarantee did not engage in anti-competitive practices.
Asked if Mr Fingleton's father was aware in advance that the e-mail was being sent, a spokesman for Irish Nationwide declined to comment. Sources said Mr Fingleton's father did not know about the e-mail in advance and had not approved it.
Mr Lenihan referred the e-mail to the Financial Regulator, which has been in contact with the building society.
The regulator has said it was looking into the matter.
"It is inappropriate to use a guarantee in marketing, advertising, or in any communications to customers or potential customers," it said, adding that all firms had been advised of this.
Central Bank governor John Hurley told reporters that the e-mail was "not acceptable" .
Mr Lenihan is understood to be "furious" with the e-mail sent by Irish Nationwide soliciting business in Britain on the back of the Government's guarantee.
Government sources said Mr Lenihan was especially annoyed with the e-mail - sent from the London office - because the Irish State had acted as a guarantor using its "good name to support the financial sector".
In an indication of the seriousness with which it has taken the development, the department last night described the e-mail as a "predatory practice".
The scheme is not yet a "done deal" and "Irish Nationwide would have to go through a rigorous application process", sources said. Such actions were of no assistance to it, they added.
"The institution involved does not as of yet have any such contract under the guarantee scheme," said a spokesman for the department. "Predatory practices of this nature must be considered before the State decides whether or not to enter into a contract with such financial institutions."
"The Minister has stated that he will have no tolerance for any financial institution which seeks to exploit competitive advantage from this guarantee."
Fine Gael deputy leader Richard Bruton yesterday accused Irish Nationwide of "touting for business" and called on Financial Regulator chief executive Patrick Neary to move swiftly and deal harshly with it.
Mr Bruton was also highly critical of Mr Neary's interview on RTÉ's Prime Time on Wednesday night and what he claimed was his "business as usual" attitude in the midst of a crisis.
"I found it astonishing to hear Patrick Neary say last night that the risky lending of banks and the property market collapse had nothing to do with the current crisis our banking sector is facing.
"I also found it incredible that he thought that bad lending practices from Irish banks was not part of the problem. His insistence that liquidity was the only issue rather than including bad lending and levels of capitalisation suggests that the regulator thinks that we are largely dealing with a business as usual situation," he said.
He said that how Mr Neary deals with Irish Nationwide will give an important insight into how the promised tougher regulatory environment will operate.
Labour deputy leader Joan Burton said the Government must spell out what action is intended to be taken against Irish Nationwide.
"The e-mail sent by an official of the Irish Nationwide touting for deposits is an indication of the potential for abuse in this scheme," she said.