Emboldening financial services whistleblowers

The Central Bank is investigating some 50 protected disclosures

 

Larry Broderick, the long-serving general secretary of the Financial Services Union, has identified the main obstacle facing whistleblowers in the banking sector as “a culture of fear” in spite of legal protections. There have been too many instances in recent years where consumers’ rights were trampled on by banks and financial institutions. Fines were imposed on some entities by the Central Bank for facilitating illegal behaviour but no individuals have been held to account. While that situation persists, there will be no incentive for senior executives who orchestrated wrongdoing and the overcharging of clients to change their ways.

Protection of citizens’ interests and the maintenance of ethical standards within powerful institutions are fundamental to a democratic society. Failure to deal with these issues can have long-term, damaging consequences, as has become evident from revelations involving Garda whistleblowers. Recent changes to the law and a ‘protected disclosure’ regime offer whistleblowers some protection but senior managers retain the whip hand. Their sense of omnipotence and invulnerability must be challenged.

The number of protected disclosures involving regulatory breaches made to the financial regulator has increased. That is a positive development, even if it is inevitable that not all of the claims in these disclosures will stand up to scrutiny. But the penalties imposed by the Central Bank for improper behaviour have failed to convince that the unhealthy symbiotic relationship that existed before the financial crash has been fully eliminated.

At the moment, investigations concerning some 50 protected disclosures are under way at the Central Bank. All is not well within the financial services sector. A willingness to adopt a ‘light touch’ regulatory regime brought much negative comment in the past. Having paid the price for that policy, however, a more robust approach by the Central Bank to regulatory breaches – involving boardroom and managerial accountability – appears to be developing. If this is so, it would be a welcome and reassuring development.

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