Pat Neary Retires - latest Anglo victim?

The light-touch regulation ethos came directly from McCreevy and McDowell who were hands-on in writing the legislation at set up the FR.
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This is not a correct reflection on Michael McDowell. He chaired the McDowell report on proposals to set up a Financial Regulator and they very strongly recommended that the Financial Regulator should be completely independent of the Central Bank. On many occasions subsequently, he was critical of the decision to leave the FR within the Central Bank. He was not in government at the time, having lost his seat.

He may have been in government when the legislation finally went through, but the principal decisions on structure had already been taken.

Brendan
 
Padraigb said:
It might be that Neary was not the guy who created the culture.
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But he did little or nothing to change it.
Padraigb said:
I suggest that we look back to the creation of the IFSC to find the point where Ireland jumped from a conservative approach to regulation to a free-for-all culture
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There is a big difference between the regulation of international banks in the IFSC and the domestic banking system. These quotes from him give an insight into his mindset (emphasis mine):
"I would find it hard to see how you'd be pressing the typical borrower to be committing more than 40 to 45 per cent of their net income into servicing a mortgage. I think after that, you'd be getting into a red zone," he warns. "But there are exceptions to everything."
 Reports that banks were offering loans of up to seven times annual salary have given Neary a bit of a canniption. "That's certainly not a multiple for an ordinary person at the top of a bus. I wouldn't like to hear that that was established as the norm. It couldn't be the norm."
So are the banks lending irresponsibly? "We ask, are you there yet? Are you over-exposed? Do you feel that you're going into the margins of the business where the risk is getting to the stage whether it's questionable whether you should be taking it on or not. We ask those questions of them. It's their call, though."
http://www.independent.ie/business/irish/neary-is-wary-about-trimming-hedge-funds-123215.html

Padraigb said:
Public service pension packages are no secret
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I have looking online for details of Neary's 'retirement' package but found nothing. Has it been made public?
Padraigb said:
Because they are not bonuses: they are the normal retirement packages.
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Normal for those in the political golden circle, far from the norm that anyone else losing their job is getting (particularly when the problems we face are not of their own doing)!

Like the bankers in Anglo, the regisnation of Neary was not prompted by the complete mess they have gotten the country into, but by a very minor issue in the grand scheme of things. This deflects from his very poor performance as a regulator, which should have led to his sacking months ago.
 
I'm not saying that Neary disagreed with the regulation culture: it is obvious that he believed in it. All I am saying is that he did not create it. I think it a fair guess that if he had a strongly-held disagreement with the culture he would not have been appointed.

Personally, I think Neary was wrong in the positions he took but I don't think he was dishonest or corrupt. If we decide that he was the person primarily responsible for the mess, then we might allow others to escape without criticism.

The fact that you cannot find details of the terms of Neary's retirement package suggests to me that there was nothing special or remarkable about it. Assuming he had 40 years's service, he should have got a lump sum of 1.5 years' final salary, and a pension of half his final salary. Whether that is based on his final rank in the CB or his salary as Regulator, I have no idea.
 
Padraigb said:
Personally, I think Neary was wrong in the positions he took but I don't think he was dishonest or corrupt. If we decide that he was the person primarily responsible for the mess, then we might allow others to escape without criticism.
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Agreed, he was neither dishonest or corrupt and shouldn't be held up as a scapegoat. But there should be some level of accountability. Instead Neary is walking off with a golden handshake, a pension of a multiple of the industrial wage and the praise of the financial regulators board ringing in his ears.

As capall said: "I guess people are angry that in Ireland the people who have contributed to the current economic crises senior bankers, politicians, some civil servants will not be the ones who will suffer because of their misjudgements and incompetence."

With the heads of the banks & govt regulators now being removed the natural conclusion is for the same to happen to the government.
 
The Anglo story will run and run as the full extent of cross financing of certain Irish businesses will become apparent over time. The question concern at this time has to be just how exposed other financial institutions are through their relationships direct or otherwise with Anglo. One fear is as the extent of this becomes known the tarnishing of prudential regulation will prove the early sceptics who labelled Ireland the Wild West.

The Neary retirement will not solve the inherent problems with the regulator which remains culturally and behaviourally wedded to its central bank roots. Nor will it deal with the inherent conflict between prudential regulation and consumer protection. I may be wrong but this body had only 20 of its senior staff involved in the prudential regulation of domestic banks until its most recent recruitment of additional expertise. It would appear that whilst it was regulator in name its resources were dissipated across a wide brief it could never have hoped to cover with the diligence required even by 2007 standards. It seems that apart from a new CEO and new way of doing things its very structure and regulatory remit will have to be reconsidered. It is no secret that senior bankers have been seriously concerned for a long time that it hadn’t the resources or competence to deliver on its regulatory brief particularly since the introduction of Basle II. I am struck by the self serving rhetoric used by IFSRA in justifying its consumer protection role where its’ shameful performance since 2003 remains to be unearthed. As a regulator it has won the golden shovel for manure shifting after the horse has bolted.
 
The Regulator is a many headed monster and losing one head will not fundamentally alter the creature's nature or behaviour.

It is a bit rich for the bankers to blame the Regulator for their own conduct. The banks' AGMs shoulds be lively affairs this year . Their shareholders who have watched their investment go down the plug hole are guaranteed to provide some heat on the shareholder value management upholders at the top table.

What do the economists have to say about the efficacy of the incentive systems that have been at play here or are they too busy talking about wage cuts for the low paid as a means to increasing competitiveness?
 
Spondulicks said:
The banks' AGMs shoulds be lively affairs this year . Their shareholders who have watched their investment go down the plug hole are guaranteed to provide some heat on the shareholder value management upholders at the top table.
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Not if they are all gone from the top table, what convenient timing for them all to resign before the AGM. Of course having left with their golden handshakes they'll be replaced with better people who will increase shareholder value as opposed to passing their time increasing their salaries/bonus/pensions etc.
 
The Board's of the Banks are under scrutiny. Can someone examine the process by which the Minister for Finance appointed the Board of the Regulator? Are their CVs on the public record?

Has anyone heard from the Irish Association of Investment Managers or the Irish Association of Pension Funds recently : they manage our investments in these companies and surely should exercise some influence over standards of behaviour and competence on the Boards largely elected by institutional shareholders.

Of course IBEC have nothing to say about the impact of the banks' behaviour with respect our competitiveness. They are too busy enjoying the hospitality at FAS. How do they keep a straight face when lecturing the public on tightening our belts and they up to their eyes attending receptions and approving spending on junkets.
 
I would love to know where the safe pari fo hands comment comes from? I find it absolutely astounding that someone would make such comments. Regulation is not about safe pair of hands etc. it is about regulation - a watch dog - an enforcer - a policer.
 
He should be and will be sued for gross negligence. The taxpayer will end up footing the bill. But it will be worth it. People have to be responsible for their judgements and actions. We, the taxpayer pay him to do his job and will pay his pension in years to come.
A surgeon may operate perfectly for 30 years. But if he is grossly negligent in the care of a patient, he will rightly be brought to court.
Part of the reason that pay of directors and managers is high is that they are taking on responsibility.
 
mattmacg said:
... Part of the reason that pay of directors and managers is high is that they are taking on responsibility.
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Dream on.

The standard defences proffered by the cosy coterie are :

IWNIO (I was never informed officially)
IWSEF (It was someone else's fault)
TWNIDH (There was nothing illegal done here)
TLWM (The letter was mislaid)

and to further cloud areas of responsibility, drive up investigation costs and bore the public to death :

WWNIATOI (What we need is a Tribunal of Inquiry).

Remember the anti-D scandal and the blood transfusion board - how many officials were charged, fined, dismissed or went to jail?
 
mathepac said:
Remember the anti-D scandal and the blood transfusion board - how many officials were charged, fined, dismissed or went to jail?
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How many should have? Who? What for?

I don't really want an answer, but I think we need to exercise some judgement and some restraint. I don't think the regulatory regime was good, but I am not sure that Neary was to blame for that (neither do I say he wasn't -- just that we should not be too hasty to judge). He might simply have been reflecting the wishes of the establishment he served -- in effect, taking a direction mapped out for him by the political masters of the system.

We should look hard at the relationship between the big beasts of the business world and the little pussycats of the political world. Perhaps rabbits might be a better simile for our politicians.
 
Padraigb said:
He might simply have been reflecting the wishes of the establishment he served -- in effect, taking a direction mapped out for him by the political masters of the system.
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What exactly is the point in having a regulator at all then? As the watchdog of the financial system he should have publically stood down if he felt the establishment were hampering his efforts to police it. As he didn't do this until it all came crashing down around him, it either means he went along with what was happening knowingly or else he didn't see any problems and was simply incapable of performing the duty assigned to him. It has been said elsewhere that Neary had nowhere near enough training or qualifications for the role, though not too sure how much truth there is to that. Does anyone know if he has a PhD, Masters or anything that would mark him out as being good potential for the role of regulator?
 
Padraigb said:
How many should have? Who? What for?
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Actually that's a good example. In France the head of the blood bank went to prison and former Prime Minister Laurent Fabius and two former ministers went on trial for involuntary homicide (I can't remember the outcome of the trial). So, what did happen here?
This is typical of how people in positions of power in this country seem to get away with anything and everything.
 
Afuera said:
What exactly is the point in having a regulator at all then? As the watchdog of the financial system he should have publically stood down if he felt the establishment were hampering his efforts to police it. As he didn't do this until it all came crashing down around him, it either means he went along with what was happening knowingly or else he didn't see any problems and was simply incapable of performing the duty assigned to him.
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I'm not suggesting that his efforts were being frustrated. What I think might be the case is that a tone was set for the office by "the establishment", and that his approach to regulation was in line with what the establishment expected of him. I think the establishment wanted light touch, and a man was selected who was comfortable with that idea.

It has been said elsewhere that Neary had nowhere near enough training or qualifications for the role, though not too sure how much truth there is to that. Does anyone know if he has a PhD, Masters or anything that would mark him out as being good potential for the role of regulator?
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What are the appropriate qualifications?
 
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