# Dail committee savages Financial Regulator



## Brendan Burgess (14 Oct 2008)

The Dáil Enterprise and Regulatory Affairs Committee savaged the Financial Regulator at a hearing today. 


Ciaran Cuffe asked Pat Neary if he could point to anything at all of which he was proud since he took over as Chief Executive. 

Shane Ross repeatedly asked Pat Neary if they had ever fined a bank. He fumbled and mumbled before being forced to answer "No".

Three members asked Pat Neary if he should resign. 

Presumably it will be lost in the Budget coverage. The transcripts are here

Brendan


----------



## Raskolnikov (14 Oct 2008)

Do you think it is likely that Neary will face repercussions over his "light touch" regulatory approach?


----------



## Brendan Burgess (14 Oct 2008)

transcripts


----------



## Brendan Burgess (14 Oct 2008)

Extract from the transcript: _Very long post_

Pat Neary: No regulatory authority, including the Financial Regulator, central bank or any other part of the international financial system anticipated the scale of the meltdown in international markets or the dismantling of the interbank credit markets that arose from the collapse of Lehman Brothers. One thing, however, was clear, namely, the ability of all banks, including Irish banks, to raise other than very short-term funding in the market essentially was eliminated. The fear in the market caused large corporate deposits to move out of the banking system and seek the safety of sovereign instruments.

  A question that has arisen is whether the loan exposures of Irish banks that are ultimately secured on property has contributed to the liquidity problems the banks faced before the Government guarantee was put in place. The global systemic failure in capital markets leading to the closedown of international interbank markets clearly is the main contributor to the lack of available funding. However, although Irish banks do not have exposures to the subprime losses and have had limited contact with so-called toxic products, the decline in share prices of the quoted Irish banks is being attributed by market commentators to the decline in the economic position here and the consequent prospects for both commercial and construction-related lending ultimately secured on property.

  The Financial Regulator had been alert to this concern for some time and has already taken significant action. In 2006 and 2007, in response to the emerging issues in the property market, we took a number of measures aimed directly at speculative commercial real estate loans and high loan-to-value ratio mortgages, especially 100% mortgages. We required banks to set aside much more capital with regard to these types of loan. We also disapplied a number of options for lower capital weighting which were available under the capital requirements directive. Our capital regime is thus one of the more stringent in Europe.

  Speculative lending to construction and property development in Ireland amounts to €39.1 billion, of which €24 billion is supported by additional collateral or alternative sources of cashflow and realisable security. This leaves a balance of €15 billion secured directly on the underlying property. There will undoubtedly be some losses on these exposures. However, any such losses would occur over a number of years and would be offset by profits on performing loans over the same period.


  Among the actions we are taking are the following: we will immediately recruit an additional 20 senior supervisory staff with banking experience to be placed on-site in key banks to monitor developments; we are now requiring banks to set out new business plans focusing on the need to reduce their risk profile and how their models of banking are sustainable in the new environment; and there will be enhanced reporting obligations regarding capital, asset quality and individual large loans to supplement our daily liquidity reporting requirements. In addition, there will be a number of other measures announced by the Minister as part of the guarantee scheme.

  Sean Ardagh:

  This suggests that, contrary to the advertisements on buses which portray the Financial Regulator as protecting people, it is protecting the liquidity and solvency of financial institutions.

  On the elephant in the room, while I am in no way suggesting that Mr. Neary should resign, there exists in the public domain questions in this regard. Perhaps Mr. Neary will outline for the committee the reasons he believes he should not resign.

*Deputy Peter Kelly:*   I welcome the delegation to the meeting. I have only one question. Did the Financial Regulator see the current financial crisis coming?

  Pat Neary: Deputy Kelly asked if we saw this coming. I do not think any regulator anywhere across the globe saw this meltdown and its proportions coming. There have been casualties in every country. It began in the United States but every European country has had casualties and every European government has had to invest huge amounts of money in solving the problem. Therefore, the answer is “No”; nobody saw this coming or foresaw the scale of the international crisis.

*Deputy Ciarán Cuffe:*   I, too, have only one question for Mr. Neary. What job has he done right since the introduction of the euro?

*Deputy **S**eán **S**herlock:*   I have listened to what the Financial Regulator had to say. When he addressed this committee on 29 April I asked the following:
  If a downturn occurs in the construction sector and there is potential for defaulting on loans, does that leave the banking sector vulnerable? Is there a role for the regulator in that regard in seeking to modify the behaviour of banks in terms of the way they loan to their customers in the future?
  Aside from other questions I asked on the day, the response I got to that particular question from Mr. Neary was as follows:
  There is no evidence that lending for speculative property development starved other sectors of resources. I have no sense of that happening but will reflect on the question and, if there is any evidence that it has taken place, I will revert to the Deputy with a reply.
  Following on from Deputy Ardagh’s question, I would be more blunt. Is Mr. Neary’s position untenable?

  Pat Neary: A concern was expressed as to whether the Financial Regulator was up to the task and the extent to which alarm bells were ringing. As I said, no regulatory authority anywhere foresaw the depth and impact of the recession. Having said that, if we wind back the clock to August 2007 when the seeds were sown and the first defaults occurred relating to securities backed by sub-prime mortgages, we will see that the domestic standing group was established at that stage. That group includes senior representatives of the Central Bank and the Department of Finance. Mr. Horan is our senior representative in the group and all of these issues were raised within it. All of these matters were on the table at the highest official level and contingency arrangements were put in place to deal with them, including crisis planning, ensuring there was access to the European Central Bank and so on.

  Deputy Kieran O’Donnell:
  In the light of what has happened, I seek Mr. Neary’s comments on his own financial stability report, published last November, in which it was stated, “The health of the banking system remains robust when measured by the usual indicators: solvency, profitability, liquidity asset quality and market indicators”. The facts do not bear this out. As for the future, does Mr. Neary believe there is an immediate requirement for a capital injection into the banking sector to keep it viable?

*S**enator **S**hane Ross:*   I thank Mr. Neary for his attendance at what is a difficult time for him. I do not hold the same view as some of my colleagues in that I believe he should resign. Moreover, he should have resigned some time ago. The reason is that it is very important that the Financial Regulator have the confidence of the people above everything else. It is obvious that he does not have the essential confidence that is necessary. The market investors in the banks have completely lost confidence in him, as have the banks’ depositors. Both groups have been voting with their feet. Investors have been selling their shares and depositors, certainly up to Monday fortnight last, were moving their deposits out of the banks as fast as they could to anywhere but those banks of which Mr. Neary is in charge. The only people who appear to have confidence in Mr. Neary are the bankers and property developers of this country.
  Were such sentiments only coming from me, Mr. Neary would not need to worry too much. However, the criticisms of him are coming from everywhere. In an article in today’s edition of _The Irish Times_ Mr. Michael Casey who worked in the Central Bank and is on the board of the International Monetary Fund states:
  The Financial Regulator and Central Bank should have been more proactive at a much earlier stage in cooling the ardour of the property market. Even without the interest rate instrument there were several things which could have been done, ranging from moral suasion, to insisting on prudent loan-to-income and loan-to-property price ratios, from raising risk weightings for property to insisting on more diversified loan books within the banks.
  He continues to make a key point about one of the problems Mr. Neary has inherited and of which he is part, by stating, “Close relationships between regulators and banks - difficult to avoid in a small country - will have to be ended”. The evidence is clear that the close relationship between the regulator and the banks is too cosy to be comfortable. Mr. Neary has often enunciated this point himself by stating he is not in favour of a highly regulated or rules-based system, but of a principles-based system. When asked for a definition, it is stated this allows “each regulated financial service provider to determine for itself how best to abide by regulatory requirements”. To me that is a licence to give all the cowboys in the banks freedom to do exactly what they like, when they like, within fairly loose rules. It is a _laissez-faire_ attitude.

  At the same time, the Financial Services Authority in the UK fined their banks £20 million. The difficulty we appear to be facing is that the thesis that the Financial Regulator is very close to the banks seems borne out by evidence. They seemed to be untouchables until very recently. I do not know of any instance where the regulator used its authority to stop particular candidates taking director positions in banks, which is also within the regulator’s power. I do not remember the regulator revoking a banking licence. It seems that the thesis that the Financial Regulator is so close to the banks is unanswerable, which is the reason the banks have been allowed to run riot in this crisis and lend to property developers willy-nilly.

I have two other queries. The consumer panel, which sits independently, stated in the last report quoted in the Comptroller and Auditor General’s report that “We have seen very little evidence in the year under review that the Financial Regulator has had the resolve to stand up to some institutions and individuals who are misbehaving”. That is an independent group, set up to look at what the regulator is doing, and it indicates the regulator is not standing up to these guys. It goes on to state “It seems that when challenged by misbehaving institutions, the Financial Regulator simply backed down”.

*Ms Mary O’Dea:*   We discussed that with the consumer panel at the time and we reject the suggestion completely. When we believe we should face down the industry on an issue we do so. The consumer panel report is a lengthy document that, in many parts, is complimentary about our work. The report indicates that the consumer panel believes our work can make a big difference to consumers but on the aforementioned point we disagreed.

*Deputy Kieran O’Donnell:*   It is a short question and I want to deal with it. Does the regulator believe those assets are worth €24 billion? That is the key? We all know the underlying assets at €15 billion are not worth what they were lent for.
*Mr. **Patrick** Neary:*  I must go by the facts at my disposal. The €24 billion is supported by collateral alternative cashflows. These loans are being serviced. If the loans are repaid in full in accordance with the agreed repayment arrangements, there will never be any need to resort to-----
*Deputy Kieran O’Donnell:*   How does the regulator define “being serviced”. Does he define it as being rolled up?
*Mr. **Patrick** Neary:*  I define loans being serviced as loans operating in accordance with the contractual terms of the loan agreement.
*Deputy Kieran O’Donnell:*  Has the regulator gone in and looked at them? These could be loans that are not being repaid, they are just rolled up. Does the regulator regard that as a repayment?
*Mr. **Patrick** Neary:*  There can be situations where loans are given on that basis where there is a roll-up of interest. That is absolutely right.
*Deputy Kieran O’Donnell:*   Therefore, what about bad debts? This is the key question.
*Mr. **Patrick** Neary:*  Exactly. This is the point.
*Deputy Kieran O’Donnell:*   The regulator is not answering the question. The question is very simple. Does he believe that the banks have a black hole in terms of bad debts? Is there a requirement for the State to immediately inject capital?
*Mr. **Patrick** Neary:*  No. I have identified €24 billion in relation to the speculative lending construction and property development sector. Most market commentators believe that is the area which is the riskiest part of the business. These loans are extended on contractual terms. They are being serviced and supported by additional collateral. The question of how much of that €24 billion can be written down depends on the ability of people to service the loan and then on the collectability and value of the collateral or the other security that is available. One could write off-----
*Deputy Kieran O’Donnell:*   This is affecting the liquidity of the banks.
*Mr. **Patrick** Neary:*  Wait a minute. One could write off that €24 billion in its entirely against the capital of €42 billion. The Deputy asked if the banks are solvent. One could write off the €39 billion and the banks would still----
*Deputy Kieran O’Donnell:*   What would the capital ratio requirements be after doing that?
*Mr. **Patrick** Neary:*  Of course they would be in breach of the capital requirements. There is no question about that.
*Deputy Kieran O’Donnell:*   Yes.
*Mr. **Patrick** Neary:*  The Deputy asked me if the banks were solvent. One must remember that the job of the Financial Regulator is to ensure solvency to protect depositors. There is still net worth in the banking system if one writes off that entire €31 billion.
*Deputy Kieran O’Donnell:*   With due respect, if the regulator does that the banks will get no access whatsoever to liquidity-----
*Mr. **Patrick** Neary:*  Exactly.
*Deputy Kieran O’Donnell:*   -----and they will not be able to function.
*Mr. **Patrick** Neary:*  We are into a theoretical discussion.
*Deputy Kieran O’Donnell:*   We are not. We are into a practical discussion.
*Mr. **Patrick** Neary:*  We are into a theoretical discussion on the value of loans on the balance sheet of the banks. It is a completely theoretical discussion.
Later

*Mr. **Patrick** Neary:*  There are a number of questions. We have dealt with the question of whether the banks are solvent.
*Deputy Leo Varadkar:*   Is it correct that all six are solvent?
*Mr. **Patrick** Neary:*  I am talking in terms of the system in place here. I cannot comment on the circumstances of individual banks
*Deputy Leo Varadkar:*   Does the regulator mean that, collectively, the banks are solvent but there may be individual banks which are insolvent?
*Mr. **Patrick** Neary:*  No, I would not say that.
*Deputy Leo Varadkar:*  What is the regulator saying?
*Mr. **Patrick** Neary:*  I do not want to be drawn into talking about individual banks.
*Deputy Damien English:*   That is why we are here.
*Deputy **S**eán **S**herlock:*   That is what we are here to do. If the taxpayer is to underwrite a guarantee for the banking sector, it is fair that we should ask pertinent questions and have an open dialogue on the issue.
*Mr. **Patrick** Neary:*  All of the banks are solvent. If they were not, they would be currently being wound up.
*Deputy Damien English:*   Is that a guarantee?
*Deputy Kieran O’Donnell:*   Are they all solvent?
*Mr. **Patrick** Neary:*  They are all solvent.
*Deputy Kieran O’Donnell:*   Does the regulator believe they are solvent?
*Chairman:*   Let us be fair. This is hypothetical.
*Deputy Damien English:*   Is that based on last year’s balance sheets?
*Deputy Kieran O’Donnell:*   It is a legitimate question.
*Chairman:*   It is hypothetical.
*Deputy Damien English:*  Is the banks’ solvency based on the balance sheets of 2007?
*Deputy Kieran O’Donnell:*   These are serious questions.
*Deputy **S**eán Ardagh:*   The Deputy is not allowing the regulator to answer the questions. Good manners would allow that. As the Chairman said, if the Deputy has supplementary questions, he can ask them.
*Deputy Damien English:*   It is budget day. We all have other things to do.

*Mr. **Patrick** Neary:* 
  Senator Ross said people may have lost confidence in me and that, as a result, I should have resigned. I dealt with that issue earlier but reject the suggestion I acted in the interests of the banks. I am a public servant and always act in the public interest. I enjoy the confidence of the authority.
*S**enator **S**hane Ross:*   Does Mr. Neary enjoy the confidence of the banks?
*Mr. **Patrick** Neary:*  I sincerely hope I enjoy everybody’s confidence but the Senator has said that is not the case. 
*S**enator **S**hane Ross:*   It is not the case in respect of the public. 
*Mr. **Patrick** Neary:*  That is an opinion but I reject the accusation that I act other than in the public interest in the way I do my job.

*S**enator **S**hane Ross:*   Has the regulator fined any banks?
*Mr. **Patrick** Neary:*  Let me put it another way. With regard to AIB overcharging, it is important that we got significant amounts of customers’ money back.
*S**enator **S**hane Ross:*   Has the regulator fined any bank?
*Mr. **Patrick** Neary:*  Fining is one option available to us. Putting things to right is also important. That has been our focus.
*S**enator **S**hane Ross:*   Has the regulator fined any banks?
*Mr. **Patrick** Neary:*  No. We have not.

  Deputy Joe Behan:
  At the outset, I wish to note my deep concern, as a citizen of both Ireland and the world, regarding Mr. Neary’s statement that no financial regulatory authority in Ireland, Europe or the world was able to foresee the cataclysmic events that took place in the banking system. I would have thought that was the reason regulators were appointed and was the job they are meant to do on behalf of citizens. It is and will be of deep concern in general that the regulatory authorities of the world have failed abysmally to protect us from what has happened. Unfortunately, as already noted, if a price must be paid, it will be ordinary citizens who will be asked to pay it, which is highly disturbing.

*Deputy Leo Varadkar:*   I have a 100% mortgage and, even though my income has just decreased by 5%, I am fortunate enough to be able to pay it. When I received my mortgage, the AIB required copies of my payslips and bank statements for three years. Should they not be required by all mortgage lenders? That appears to be a more appropriate approach than that of self-certification.
*Ms Mary O’Dea:*   I would be surprised if most mortgage lenders did not follow that practice. It depends, however, on the nature of one’s job and the relative ease with which the necessary information can be provided. We are trying to strike a balance between allowing people to borrow money which they can legitimately repay and not making it so difficult that those whose income fluctuates can never get a mortgage. The vast majority of lenders would demand the information described by the Deputy. I am glad he had a positive experience. 
*Deputy Leo Varadkar:*   It was not that positive.


----------



## z109 (16 Oct 2008)

Thanks for taking the time Brendan, I find the following section astonishing in a Monty Python meets Yes, Prime Minister fashion:





> *Deputy Kieran O’Donnell:*   How does the regulator define “being serviced”. Does he define it as being rolled up?
> *Mr. **Patrick** Neary:*  I define loans being serviced as loans operating in accordance with the contractual terms of the loan agreement.
> *Deputy Kieran O’Donnell:* Has the regulator gone in and looked at them? These could be loans that are not being repaid, they are just rolled up. Does the regulator regard that as a repayment?
> *Mr. **Patrick** Neary:*  There can be situations where loans are given on that basis where there is a roll-up of interest. That is absolutely right.
> ...


----------



## tiger (16 Oct 2008)

It's both shocking and depressing.  He's basically admitting that the banks have massive bad loans on their books, but he can't/won't make them write them down because then they'd be in even worse shape.  Until this attitude changes, we're in bad shape.  Ireland is going Japanese


----------



## Brendan Burgess (16 Oct 2008)

I am not sure that is what he is saying at all. 

Ireland subscribes to international accounting standards which prevents banks from making general provisions against bad loans. 

So, in law, banks can only make provisions against specific loans which are in arrears. As an accountant, I think that this is stupid.

Brendan


----------



## tiger (16 Oct 2008)

Maybe I'm reading it wrong (too much between the lines?), but if I cut out some of the lines I get:

*PN:* …. I have identified €24 billion in relation to the speculative lending construction and property development sector….One could write off .. that €24 billion in its entirely against the capital of €42 billion ..  and the banks would still (_be solvent but_)
they would be in breach of the capital requirements…
*KOD:* With due respect, if the regulator does that the banks will get no access whatsoever to liquidity-----
*PN:* Exactly.
*KOD:* -----and they will not be able to function.


----------



## Brendan Burgess (16 Oct 2008)

Hi tiger

He is not suggesting that one should write that off. 

What he is saying is that even if one had to write off all of that completely, which would not be necessary, the banks would still be solvent. 

Brendan


----------



## WILLY NILLY (16 Oct 2008)

Many years ago, I used to be the treasurer of my credit union and the League rules provided that there should be two provisions for bad debts........a specific provision based on the actual loans that were falling into arrears ......................and secondly a general provision against bad debts which was arrived at by taking a percentage (5 % or something) of the total loans issued.


----------



## Mumha (16 Oct 2008)

So, after all that, Neary keeps his job ? I'm going off to download the Boomtown Rats "Banana Republic". It is most apt at a time like this....


----------



## Bronte (17 Oct 2008)

How exactly does the roll over of interest work?  Surely this would result in the initial debt going into astronomical figures if it was rolled over for a long period?  Do developers not pay commercial rates to banks or are they so big they pay very low interest rates?  I ask this to try and understand how Neary is getting to 24 Billion of debt


----------



## WILLY NILLY (17 Oct 2008)

In the sunday indo last sunday, there was a suggestion that banks are lending money to developers to be used to pay off the interest arising thereby making it look like the loan is ok.

Scary if true as the debt to the bank continues to rise


----------



## corkfella (17 Oct 2008)

I find it quite amazing that he has not been made resign by the government, I saw some of this on the news and also his recent appearance on prime time and it strikes me that the man has no idea to what he is doing and almost displays a flippant attitude to what is going on. Does any level of incompetence get punished by this current government?


----------



## Purple (17 Oct 2008)

Developer A goes to bank 1 to get loan for land bank. Developer B goes to bank 2 to buy same land bank. The price is bid up on the basis of how much banks 1 and 2 are willing to lend to their respective developer customers, not by any real market value of the land.
Developer A gets the biggest loan from bank 1 to buy site and builds 500 units. Bank 1 come looking for their money and developer A says, “Look; you better lend whatever is required to the plebs buying my 500 units or I can’t pay you back.”

...so because the bank effectively bid up the site price they then have to give out massive mortgages based on ludicrously high income multiples in order to get their money back from the developer. 
It’s like a pyramid scheme where always the banks were at the top and the plebs (us) were always at the bottom.

Where was the regulator when all of this was going on?


----------



## LDFerguson (17 Oct 2008)

Bronte said:


> How exactly does the roll over of interest work? Surely this would result in the initial debt going into astronomical figures if it was rolled over for a long period?


 
If you own a site and you're borrowing €X million to build X houses / shops / offices / apartments on it, you won't have any income from the project until the build is complete and you start selling or renting the completed properties.  So the lender may offer to defer any requirement for you to make repayments on the loan for a specified period, e.g. two years until you start selling or renting the finished properties.  During this period, interest on money drawn down is rolling up onto your loan.  

And yes the effect of compunding can be quite scary if you don't manage to shift units or find some other method of paying off some interest for a protracted period.


----------



## Duke of Marmalade (17 Oct 2008)

corkfella said:


> I find it quite amazing that he has not been made resign by the government...


This scapegoating of PN is at best misinformed and at worst (Senator Ross) quite malicious.

PN tells us that in a worst case scenario the banks are solvent. Ergo, he has done his job. Of course in such a scenario fresh capital will be needed, that is always the case else we would have over capitalised banks.

Lets us reflect, and touch wood, that the Irish taxpayer so far is completely unscathed (this has nothing to do with medical cards, irrespective what we might hear on the Joe Duffy show).

The American taxpayer will buy up the NINJA loans. What chance will they ever get their money back?

The UK taxpayer has bought up bank equity - ok slightly better chance of getting their money back.

The Irish taxpayer will pay higher for its national debt but will be reimbursed by the banks.

If we pull this off, PN and the 2 Bs should be knighted or whatever equivalent we have.

_PS I have no axe to grind for PN and do not know him personally._


----------



## Purple (17 Oct 2008)

Duke of Marmalade said:


> This scapegoating of PN is at best misinformed and at worst (Senator Ross) quite malicious.
> 
> PN tells us that in a worst case scenario the banks are solvent. Ergo, he has done his job. Of course in such a scenario fresh capital will be needed, that is always the case else we would have over capitalised banks.
> 
> ...



Good post, good points but where was he for the last few years?


----------



## tiger (17 Oct 2008)

Brendan said:


> Hi tiger
> 
> He is not suggesting that one should write that off.
> 
> ...


Is he not saying he _can't _write it off, as then the banks would be unable to function?


----------



## corkfella (17 Oct 2008)

Duke of Marmalade said:


> This scapegoating of PN is at best misinformed and at worst (Senator Ross) quite malicious.
> 
> PN tells us that in a worst case scenario the banks are solvent. Ergo, he has done his job. Of course in such a scenario fresh capital will be needed, that is always the case else we would have over capitalised banks.
> 
> ...


 
Sorry Mr.Neary I did not know you personally looked at this website. I cannot believe you are defending this guy, bottom line he did not do his job at all, you say that so far the irish taxpayer is not affected, not true.

we will have to borrow money internationally at a higher rate because the government has given the undertaking to back deposits. An awful lot of people(foolishly I know but nevertheless) took out huge 100% mortgages a product which should never have been allowed on the market by P.N. 

The man is incompetent but is still in a job explain that?


----------



## Bronte (17 Oct 2008)

Duke of Marmalade said:


> The Irish taxpayer will pay higher for its national debt but will be reimbursed by the banks.


There is nothing on earth that will convince me this will happen. Remember AIB.  No bank has been fined any significant sum for any of the other misdeeds and why should I believe this is any different. 

They haven't even rapped the banks over the knuckles, nor have they reduced their grossly inflated bonus which are based on their 'performance'  It's some performance to have allowed 100% mortgages to people who could clearly not afford to repay them and to accommodate people purchasing property at grosly overinflated prices.  Isn't  that the regulator's job to look after the ordinary people.  To look after their interests.  But then again I'm incorrect his job is to look after his banking buddies.


----------



## Bronte (17 Oct 2008)

LDFerguson said:


> If you own a site and you're borrowing €X million to build X houses / shops / offices / apartments on it, you won't have any income from the project until the build is complete and you start selling or renting the completed properties. So the lender may offer to defer any requirement for you to make repayments on the loan for a specified period, e.g. two years until you start selling or renting the finished properties. During this period, interest on money drawn down is rolling up onto your loan.
> 
> And yes the effect of compunding can be quite scary if you don't manage to shift units or find some other method of paying off some interest for a protracted period.


 
So does the deferred interest get included in the 24 billion?  Or is it 'called' something else so that the regulator/banks don't have to put it in the books as debt?  

And what happens when you don't repay by x date, isn't there then interest on the interest?  Or do the banks just keep changing the dates ad infinitum?  I don't trust one word of what the regulator says. He's just a patsy.


----------



## Jack2008 (17 Oct 2008)

I agree with the majority of you except never mind resignation - Why has'nt he been fired!!!!!!

He is not been made accountable for his mistakes. But sure why would he, he is a civil servant virtualy impossible to fire him.

I see our government has opted to put two people on the BOM's of the banks - more jobs for the boys. Will be interesting to see if they advertise these jobs, who gets them and how much they are paid!!!!!


----------



## Duke of Marmalade (17 Oct 2008)

corkfella said:


> Sorry Mr.Neary I did not know you personally looked at this website. I cannot believe you are defending this guy, bottom line he did not do his job at all, you say that so far the irish taxpayer is not affected, not true.
> 
> we will have to borrow money internationally at a higher rate because the government has given the undertaking to back deposits. An awful lot of people(foolishly I know but nevertheless) took out huge 100% mortgages a product which should never have been allowed on the market by P.N.
> 
> The man is incompetent but is still in a job explain that?


Against AAM guidelines to speculate on contributor's identities. I assume PN has better things to do than chat on AAM.

The government have said the banks will pay €1Bn to compensate for the higher cost of international borrowing. Or are you Brian Lenihan and know you are lying?

It is highly condescending to say that 100% mortgages are wicked. I was once penniless but in a good job, what I would have given for a 100% mortgage, instead I was at a big disadvantage to my peers with rich daddys. No evidence at all that these 100% mortgages are causing any more stress than traditional mortgages.

I see no resignations amongst US, UK, German or other financial regulators and so far our man is clearly outperforming his foreign counterparts.


----------



## Brendan Burgess (17 Oct 2008)

It is very easy to pick on a scapegoat, call him incompetent and call on them to resign. 

It is much harder to check out the facts. Look at what the Regulator actually did do and what they could have done. 

Compare that to what all the regulators in other countries did.

And then make a neutral assessment. 

I wouldn't go so far as the Duke in calling for Pat Neary to be knighted, but it's too simplistic calling for him to resign. 

The Financial Regulator is in a very difficult position. It is not free to speak openly about the solvency of individual banks. This makes it appear that Pat Neary is hiding something or doesn't know what he is doing. This is just not correct. 

Brendan


----------



## Sunny (18 Oct 2008)

I agree that the problem with regulation is not just an Irish problem. The same accusations made here are being made worldwide. However, there is also no doubt that regulation in this country which is all we can worry about has been an utter complete failure. I find it interesting that the Financial Regulator are now advertising looking for bank supervisors to go into banks and look at credit, market and liquidity risks etc for the duration of the government guarantee scheme. Maybe I am missing something but is the Financial Regulator saying that they don't already have qualified staff in this area on their books and they haven't been looking at all these things in the past?


----------



## Brendan Burgess (18 Oct 2008)

> there is also no doubt that regulation in this country which is all we can worry about has been an utter complete failure.



When I see an expression like "obviously" or "there is no doubt", it usually is not obviously and in this case there is plenty of doubt. 

Did you read the Duke's post? He doubts it. I doubt it. 

Regulation is not management. No one foresaw the extent of the international credit crisis. Early in 2007, the FR did introduce enhanced liquidity reporting ahead of anyone else. They did raise the capital required for high LTV mortgages and for lending to property developers. They did force the banks to stress test their lending and they did rein in the EBS when they ignored that stress testing. 

They participated in the design of the bank guarantee scheme which was the first to be introduced and this has been copied by everyone else. 

Taxpayers' money has been used to bail out banks in the UK and in America and in other countries. So far, the taxpayer has not had to put any money into Irish banks, although they may well have to in the future. 

Sure, they could have done better. But to describe it as "utter complete failure" ignores the positives.

Brendan


----------



## z109 (19 Oct 2008)

Brendan said:


> No one foresaw the extent of the international credit crisis.


There's that Mr. noone again. Odysseus would be proud of you Polyphemus. Many people foresaw what was to come. Just none of them were politicians, senior civil servants or bankers in this country.



> Early in 2007, the FR did introduce enhanced liquidity reporting ahead of anyone else. They did raise the capital required for high LTV mortgages and for lending to property developers. They did force the banks to stress test their lending and they did rein in the EBS when they ignored that stress testing.


Um, ECB+1.75%, was it? At a time when ECB rates were at a historical low (even when looking back at Bundesbank rates). A stress test that was easier to pass then the test the banks were currently using - amounting as it did to a higher proportion of takehome pay. Thereby increasing 'affordability' and letting banks lend more? And you call this a good thing?



> They participated in the design of the bank guarantee scheme which was the first to be introduced and this has been copied by everyone else.


No it hasn't - no other country is guaranteeing long-term banking debt. 



> Sure, they could have done better. But to describe it as "utter complete failure" ignores the positives.


This is like looking at a keeper who has let in two goals through glaring mistakes and saying that he throws the ball out well so he will have positives to take from the game despite the fact we are only ten minutes into the game...


----------



## Sunny (19 Oct 2008)

Brendan said:


> Sure, they could have done better. But to describe it as "utter complete failure" ignores the positives.
> 
> Brendan


 
What are the positives? I suppose everyone knows what a tracker mortgage is now. Even ignoring the credit crisis, look at every scandal that has hit the Irish banks in the past few years and look at the reaction of the financial regulator. Can anyone really say it was adequate? When Prime Time had the programme on mis-selling of financial products, what did the financial regulator do? Oh yes, they ASKED the banks to promise in writing that it wasn't happening. 

As for the credit crisis, I still want to know why they have to advertise to hire people to supervise banks risks during the period of the guarantee scheme. Is the regulator really saying that he doesn't have these people already?


----------



## markpb (19 Oct 2008)

corkfella said:


> The man is incompetent but is still in a job explain that?



If he was fired or allows resign, it would look as if he'd done something wrong. This would make a lie of the line that the government are currently peddling that we're not in a recession of our own making. They still want us to believe that there's no bubble, no problems with Irish developers or banks but that all our ills are caused by the 'credit crunch'.


----------



## Brendan Burgess (20 Oct 2008)

Hi Sunny



> look at every scandal that has hit the Irish banks in the past few years and look at the reaction of the financial regulator.


 
The FR got refunds of €180m from Irish consumers very quickly. 

After the tax issues relating to AIB(?) subsidiaries, the people who had been involved, stepped down immediately. This would not have happened in the Central Bank days. 



> they ASKED the banks to promise in writing that it wasn't happening.


 
This response from the FR was completely unacceptable. 



> I still want to know why they have to advertise to hire people to supervise banks risks during the period of the guarantee scheme. Is the regulator really saying that he doesn't have these people already?


 
Staffing has always been a serious problem for the FR.  In fact, I can't see where they are going to get these 20 people from.  They can't compete on salaries with what the banks are paying. 

They have not done enough inspections of Irish financial institutions. This was a finding from the Comptroller and Auditor General. I think that the Consumer Panel commented on this as well. 

The level of supervision required has increased dramatically, so more staff will be needed. 

Brendan


----------



## Duke of Marmalade (20 Oct 2008)

I think we need to face up to a reality here. Our system of regulation relies on the FR setting the right standards, asking the right questions and crucially *getting the right answers*. In the Mary O'Dea/Primetime debacle the issue is not that she did wrong but, having got inadequate answers, what was she going to do about it?

In the present situation PN has stated a lot of facts. But let's make no mistake, he got these facts from the banks. The facts state that the regulation has not yet failed - in worst case scenario, they are solvent, but will need to raise more capital.

If the facts have been misrepresented then we have the death knell of the traditional system - banks maximising profit whilst keeping "the right side" of the FR. The new order will be a nationalised banking system run in the public interest. That would include being profitable but not as the overarching objective.


----------



## Bronte (20 Oct 2008)

Duke of Marmalade said:


> The government have said the banks will pay €1Bn to compensate for the higher cost of international borrowing.


 
This is not true, the banks are going to get this not from their shareholders or profits but by increasing the cost of banking for all of us.  So we pay on the double.


----------



## Bronte (20 Oct 2008)

Brendan said:


> The FR got refunds of €180m from Irish consumers very quickly.
> 
> I don't understand this?
> 
> ...


 
Then maybe the banks should pay the regulator so that he in turn can afford the salaries needed to get the best people.


----------



## Bronte (20 Oct 2008)

Duke of Marmalade said:


> I see no resignations amongst US, UK, German or other financial regulators and so far our man is clearly outperforming his foreign counterparts.


 This is also not true........ from RTE, I can't do links......
The chairman and director general of the French bank Caisse d'Epargne quit yesterday over a €600m derivative trading loss at the height of the global finance crisis. 
Chairman Charles Milhaud said in a statement after an emergency supervisory board meeting that he was taking full responsibility for the loss and would not seek leaving payment. 
The director general of the mutual bank also resigned and a bank source said its chief financial officer had tendered his resignation.


----------



## Brendan Burgess (20 Oct 2008)

Hi Bronte



> Then maybe the banks should pay the regulator so that he in turn can afford the salaries needed to get the best people.


 
The financial services industry pays 50% of the FR's budget. We, the taxapers, pay the other 50%.



> This is also not true........ from RTE, I can't do links......
> The chairman and director general of the French bank Caisse d'Epargne quit yesterday


 
The Duke said that no regulators had resigned. There have been resignations and probably dismissals from banks. Caisse d'Epargne is a bank, not a regulator. 

This thread is about the performance of the Financial Regulator

Brendan


----------



## Brendan Burgess (20 Oct 2008)

I wrote a more comprehensive assessment in yesterday's Sunday Business Post. 

[broken link removed]

Brendan


----------



## LennyBriscoe (20 Oct 2008)

I'd like to know when the banks were found to be over charging their customers the FR did not fine them.


----------



## Camry (20 Oct 2008)

Here are two errors. I will reserve any comment on interpretation and opinion expressed throughout the article:



> the regulator and the Department of Finance devised the scheme that resulted in the Irish government being the first to guarantee the liabilities of all banks


.

It guaranteed the liabilities of three banks and two building societies. Subsequently (in fact very recently) it acceded to demands from the EU competiton commission to allow applications from other banks.



> This bold measure has since been followed by most other governments. So the Financial Regulator has not been slow to respond


 
I would be happy to concede this is true if somone can cite even one country that also guaranteed "all bank liabilities".


----------



## Brendan Burgess (20 Oct 2008)

Hi Camry 



> There are some significant factual errors in that article.


 
Can you please point out the significance of these _errors_ in the context of the article's main point which is that the FR has been unfairly singled out for blame? 

My point is that the Regulator responded promptly. You may have some inside information. For example, the Regulator may well have told the Minister that it would take them three months to produce proposals. 

The scheme has not been copied exactly by other regulators, but in practical terms, they followed the lead set by Ireland, but adapting it to their own circumstances. 

Neither error is significant in the context of the point of the article.

Brendan


----------



## Duke of Marmalade (20 Oct 2008)

Bronte said:


> This is not true, the banks are going to get this not from their shareholders or profits but by increasing the cost of banking for all of us. So we pay on the double.


_Bronte_ the point I was making was that taxpayers would not be out of pocket. Do you accept that point?


----------



## Bronte (21 Oct 2008)

Duke of Marmalade said:


> _Bronte_ the point I was making was that taxpayers would not be out of pocket. Do you accept that point?


Sorry I do not accept that point but I'm open to changing my mind if your arguments convince me.  From where exactly do you think the banks are going to get the money to pay?


----------



## Bronte (21 Oct 2008)

Brendan said:


> I wrote a more comprehensive assessment in yesterday's Sunday Business Post.
> 
> [broken link removed]
> 
> Brendan


 
If you don't mind me saying so, the fact that you were chairman of the consumer panel of the Financial regulator would make me think that you could be biased to be more positive as you would be I assume dealing with people from this office on a personal level and that will always change things.  (I do not know what being Chairman consists of)
I don't have any problem with you pointing out the good things the regulator does, but, aren't you only pointing out what they should be doing, why should they be praised for doing what is in essence their job?
As for overcharging, this has not changed at all, so what is the regulator doing about this, there was the Bolger case two weeks ago which apparently was a systematic system of overcharging.  What is the regulator going to do about that in relation to other businesses as I find it incomprehensible that only one business was targeted over a ten year period.  Why doesn't the regulator put in place a system whereby people have to report if a bank is overcharging (or whatever misdeed is involved), that it is the responsibility of the individual employee in the bank to point out these things directly to the regulator - a bit like the Sarbanes Oxlay act brought in after the Enron scandal but tweaked to apply to financial institutions. For there to be overcharging there must be someone in IT who creates the accountancy programmes to do the overcharging, there must be a person who administers it, there must be bright staff who realise there is overcharging, there must be customers who bring it to the attention of bank managers etc.  A kind of loyalty and integrity to the customer rather than to the bank would also be nice from staff. That is the kind of thing I wish the regulator was doing.  (Sorry if this is all over the place I'm not as eloquent as others with my points)


----------



## JohnBoy (21 Oct 2008)

Brendan said:


> actually did do and what they could have done.
> 
> Compare that to what all the regulators in other countries did.
> 
> Brendan


 
If you look at Spain there is a lesson there for our regulator. Although Spain is suffering from a post property-boom hangover, its major banks are in a relatively strong financial position. Whilst many of the of the local 'cajas' will fail, the large Spanish bank have been acquiring bargain banking assets in the UK and US. The conservative and proactive Spanish Central Bank and financial regulator have helped the main banks avoid many of the problems that have beset the Irish banks. Ditto the French regulator.


----------



## Brendan Burgess (21 Oct 2008)

Hi Bronte



> If you don't mind me saying so, the fact that you were chairman of the consumer panel of the Financial regulator would make me think that you could be biased to be more positive as you would be I assume dealing with people from this office on a personal level and that will always change things. (I do not know what being Chairman consists of)



The[broken link removed] is appointed by the Minister for Finance, and not by the Financial Regulator. 

Its role is to comment on the performance of the Financial Regulator and represent the interests of consumers. 

So I spent three years chairing a committee of 20 people. We produced various annual reports and performance reviews. They represented the consensus views of the Panel. They were not written from a crusading point of view. They were not written from a political or media point of view. We collected the evidence from various sources. We interacted with the staff of the FR. And we produced balanced reports based on evidence. 

You can read the full reports on the [broken link removed].

We did not hold back our criticism. Nor did we hold back our praise when it was due. We also tried to understand the difficulties facing the regulator - prudential supervision is not really something which they can go on the Joe Duffy show and share their concerns about particular banks. 

Am I biased? I doubt it. If there was any bias arising from my dealings with the senior staff in the FR, it would be a negative bias. But I would always try very hard to overcome any such bias. 

I am not always right and I am always open to correction. But I do try to base my assessments and opinions on facts, rather than on headlines. 

Brendan


----------



## Duke of Marmalade (21 Oct 2008)

Bronte said:


> Sorry I do not accept that point _(that taxpayers won't pay)_ but I'm open to changing my mind if your arguments convince me. From where exactly do you think the banks are going to get the money to pay?


Let's say the banks get it from charging customers, maybe reducing those 6% deposit rates. Are you saying these customers are taxpayers and therefore taxpayers are paying? By "taxpayers" I mean the public finances, but if you mean anybody who is paying taxes including bank shareholders, staff and customers well you are speaking a rather vacuous truism.

BTW I thought your personal attack on the _Boss_ was gratuitous though I note he has given you the courtesy of a reasoned response.


----------



## Bronte (21 Oct 2008)

Duke of Marmalade said:


> Let's say the banks get it from charging customers, maybe reducing those 6% deposit rates. Are you saying these customers are taxpayers and therefore taxpayers are paying? By "taxpayers" I mean the public finances, but if you mean anybody who is paying taxes including bank shareholders, staff and customers well you are speaking a rather vacuous truism.
> 
> BTW I thought your personal attack on the _Boss_ was gratuitous though I note he has given you the courtesy of a reasoned response.


Duke you didn't answer my question - where are the banks going to get the money to pay?  Maybe I don't understand what you mean, actually I don't.  

In relation to the owner of AAM I did not intend to be gratuitous, and I apologise if it comes across that way but this is a discussion forum and he says he welcomes all viewpoints (I think, though someone else got deleted earlier today).  I'm not a banking expert, just an ordinary joe soap who is trying desperately to understand this credit crisis (which I still don't) but I am one hell of a mad taxpayer particularly at banks.  I also think AAM does a great job as does it's boss whom I've never heard speak so I can't coment on that but at least you feel he's on our side like Shane Ross (I know you'll all groan) but they do the job of eloquently fighting for the little guys and I'll always be on their side. I'm a bit lost really as to where I was gratuitous.


----------



## LennyBriscoe (21 Oct 2008)

Shane Ross has called for the resignation of the FR. So Brendan and Shane Ross are not on the same side!


----------



## Brendan Burgess (21 Oct 2008)

Hi Bronte

I didn't take offence at your comment. The tone struck me as a fair question as distinct from an abusive accusation. _(Duke _thanks for defending my honour.)

Just to assure you, no one gets banned for disagreeing with me or with anyone else. 

When people are abusive to me or to any other poster or otherwise in breach of the posting guidelines, their abusive posts are deleted and they receive a warning.  Even if a user is banned, their posts which comply with the Posting Guidelines are left in public.  So Camry was not banned for disagreeing with my opinions or for pointing out errors.  The posts for which he was banned, have been deleted.

Brendan


----------



## Afuera (21 Oct 2008)

Brendan said:


> The[broken link removed] is appointed by the Minister for Finance, and not by the Financial Regulator.
> 
> Its role is to comment on the performance of the Financial Regulator and represent the interests of consumers.
> 
> So I spent three years chairing a committee of 20 people. We produced various annual reports and performance reviews. They represented the consensus views of the Panel. They were not written from a crusading point of view. They were not written from a political or media point of view. We collected the evidence from various sources. We interacted with the staff of the FR. And we produced balanced reports based on evidence.


Brendan I appreciate you taking the time to explain a little more about the role of the Consumer Panel to the FR. One thing that seems to stand out from a cursory look at the current panel members is their diverse backgrounds (lawyers, accountants, teachers, etc). There doesn´t seem to be a single economist or anyone with investment banking experience. Was the makeup of the group similar when you were chair? If so, how comfortable were you that important indicators of the regulatory authority´s performance were not being overlooked? For example there were economist friends of mine telling me that a figure of 33% for money creation considering our GDP was an enormous warning sign a few years back.


----------



## Brendan Burgess (21 Oct 2008)

Hi Afuera

The composition was a matter for the Minister, as advised by the Department of Finance. 

Sure we could have had an economist. But that would not really have added that much. The Central Bank and Financial Regulator are full of economists. The media and every stockbroking house are full of economists. I would doubt that the appointment of one to the Consumer Panel would have given us some special foresight to predict that the international banking system would freeze.


----------



## VOR (22 Oct 2008)

I have read the transcipt and am apalled. FR was asked about liquidity and answered by speaking about solvency. That's Yes Minister stuff. He didn't give a straight answer and just dodged the question.
Secondly, there is absolutely no talk of Basle II which is driving a lot of the problems. 
From what I have read from both sides of the Atlantic, the knowledge of banking law amongst mainstream commentators (economists or otherwise) is terrible.


----------



## Duke of Marmalade (22 Oct 2008)

Bronte said:


> Duke you didn't answer my question - where are the banks going to get the money to pay? Maybe I don't understand what you mean, actually I don't.
> 
> I'm a bit lost really as to where I was gratuitous.


 
I'm obviously v.v. bad at getting my point across. The banks will pay for this from one or other of its three stakeholders - shareholders, staff or customers. That is not what I mean by the "taxpayer" and it is not what I thought you originally meant, but of course you are literally correct these people probably do pay taxes.

"Gratuitous - Unwarranted", it was my personal opinion.


----------



## tiger (24 Oct 2008)

scapegoat suggests he's the only one who should suffer the consequences.  I agree he should not be the only one made to resign, I would suggest the senior management of most of the banks have questions to answer to their shareholders.  If I had a significant shareholding in any of the banks, I'd be demanding resignations.


----------



## Afuera (24 Oct 2008)

Brendan said:


> Sure we could have had an economist. But that would not really have added that much. The Central Bank and Financial Regulator are full of economists. The media and every stockbroking house are full of economists. I would doubt that the appointment of one to the Consumer Panel would have given us some special foresight to predict that the international banking system would freeze.


Brendan, I don't see why you are placing so much emphasis on the predictability or not of the credit crunch. The only thing that should be important to the financial regulator, and those overseeing its performance, is whether it is being prudent. The fact that the board overseeing the FR is politically chosen and may not be trained or have the knowledge to identify what passes for prudent regulatory behaviour appears to be an issue.


----------



## NorthDrum (24 Oct 2008)

Sounds to me like its nobodys fault!!!! 

The banks, the government, the regulator oh my . . . 

Yes there is a moral duty on behalf of all concerned to protect the public, but at the end of the day nobody forced people to take out 100% mortgages or to debt themselves up to the hills. Its like saying its the governments fault that we have such a "culture" of binge drinkers when we as a society have allowed ourselves to get into this mess (in a matter of speaking).

Me, I personally think that one of the biggest problems in this whole saga is accountability. Nobodys getting really punished properly for the crimes that have been done, but then again is that really surprising? If there were proper punishments for these "rogue traders"  it would certainly make them think twice about doing the same unforgivable transactions in the future. It might not fully prevent it, but its a start.

If I dont pay my T.V. licence for a station I dont watch, I could potentially go to prison, but if I gamble a nations deposit on dodgy bets, I get to retire a millionaire . . A bit Simplistic perhaps (even Joe Duffy'ish), but sometimes the obvious explanation is the right one, if not one with far more dynamics involved.
 
The banks, the FR, the government have all contributed one way or another to the problem. We, the consumers have been lambs to the slaughter, but like sheep have followed the flock into the slaughterhouse and have to take the responsibility of that role. 

*Accountability . . .*

There is a culture in this country of looking for somebody else to blame for things that happen to us, irrespective of how involved we are in the mess. We voted in the government, we did not protest at them pis*ing away our money (when the good times rolled), we didnt demand a tougher regulation on banks even though it was blatantly obvious that . . 

Our government mirrors its people, they are reactive rather then pro-active. They only respond to real protests or real threats. Not people phoning in the Joe Duffy show or people having a moan about it in a pub or on a website.

Anybody who laughs at the U.S. for voting Bush in twice, you know the saying about throwing stones in glasshouses . .

That said it seems to be we, the public, have ended up worse off then the Brandy swirling suits at the top of the pyramid . . . While I do accept that the "bailout" and all that has gone with it was necessary for us all, I do not accept that the appropriate bodies responsible for protecting the public have done their job properly. Prevention is better then cure, quoting other countries practises does not excuse negligence or ignorance. . .

If this is not correct, rather then discussing who is'nt at fault for these problems, could somebody actually say who is?

_Greed denotes desire to acquire wealth or possessions beyond the needs of the individual, especially when this accumulation of possession denies others legitimate needs or access to those or other resources._


----------



## kaplan (4 Nov 2008)

IFRSA problem lies in its dual mandate of prudential banking supervision and consumer protection where it is accepted that both have suffered from being sighted within one regulatory body. The original government decision required the McDowell committee to only consider a super regulator having a dual mandate. The central bank, department for finance, ECB and OECD objected to the separation of prudential supervision from the central bank role whilst the McDowell committee recommended an FSA type regulatory authority separate from the central bank. What we got was a compromise which undermined both mandates. The sop was the establishment of two consultative panels which have become largely captive of the Regulator. 

Banking supervision adopted a principles based approach which broadly works on the basis of principles of prudential behaviour and desired outcomes. It is up to a bank to translate principles into internal policy and rules etc providing the desired outcome is achieved – this contrasts with the FSA and Fed approaches which set out detailed rules which banks must comply with, although the FSA as late as 2007 signalled a shift to principles based supervision. 

Both approaches were found wanting during the credit crunch principally due to the reliance of banking supervisors on open market discipline – that is banks etc managing counterparty risks which in turn was a factor of credit rating agency effectiveness. Greenspan has admitted that this did not work and hence the meltdown. 

So regulators are to blame for believing in free market self discipline which worked for 40 years according to Greenspan and others who maintained it was cheaper to let asset bubble run their course. Bernanke has said that in future bubbles will need to be “controlled”. 

But as far as Ireland’s domestic property bubble is concerned prudential supervision appears not to have as been effective as it could have been in controlling the property boom excess from 2003 onwards. Although it sounded warnings and took action it did so within the context of governmental policy to allow the property market to operate freely without intervention except of course to stoke it up through tax breaks. A strong independent regulator, free of departmental oversight may have stood its ground earlier and prevented banks from engaging in reckless lending.

Secondly a strong independent consumer protection agency could have insisted on protections similar to France and Australia where product features, lending assessment etc are controlled to protect consumers from the excessive exuberance of credit led property bubbles. 

One thing is certain both banking and consumer interests consider the IFSRA dual mandate as flawed and in need of review. Whether this takes the form of an independent banking supervisor allied to the central bank and separate consumer protection agency is it appears down to government policy that until now has insisted on combining industry regulation with consumer protection (banking & utilities for example). What’s unnerving is the original McDowell report found the combination of banking supervision and consumer protection to have been the exception rather than the norm yet it recommended a dual mandate super regulator and sowed the seeds of infectiveness in both.


----------

