Pat Neary Retires - latest Anglo victim?

[Afuera]

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.

So you think he may have been chosen purposely because he was a light touch? It's possible that this may be the case, but I think that is really just a nicer way of saying we was inept at his job.

What are the appropriate qualifications?

These days an economist starting off in a banking career would need a minimum qualification at a Masters level, or more ideally have a PhD.

The Irish Times had an article profiling Pat Neary on Jan 10th where it mentioned that he only spent a year in UCD studying Latin and Greek before joining the Central Bank.

 

[Padraigb]

So you think he may have been chosen purposely because he was a light touch? It's possible that this may be the case, but I think that is really just a nicer way of saying we was inept at his job.

Yes, I do suspect that he might have been chosen because he believed in light-touch regulation. But I don't think that is just a nice way of saying that he was inept: I think that the job that you (and I) think he should have been given to do was not the job he was actually asked to undertake.

These days an economist starting off in a banking career would need a minimum qualification at a Masters level, or more ideally have a PhD.

The Irish Times had an article profiling Pat Neary on Jan 10th where it mentioned that he only spent a year in UCD studying Latin and Greek before joining the Central Bank.

I noticed that, and was a bit surprised. But you seem to presume that the regulator should be an economist. I'm not sure that is necessary, because the regulator does not, as I understand it, have any function in the general guidance or direction of banking. That's why I raised the question about qualifications. I'm not sure what the answer should be.

 

[Afuera]

Yes, I do suspect that he might have been chosen because he believed in light-touch regulation. But I don't think that is just a nice way of saying that he was inept: I think that the job that you (and I) think he should have been given to do was not the job he was actually asked to undertake.

Sorry I don't buy that.

The Financial Regulator's website quite clearly explains the role that was expected of him.

The Financial Regulator contributes to the work of the Central Bank in discharging its responsibility in relation to the maintenance of overall financial stability.

Given his training and experience I think it is more likely that he was simply unable for the position.

 

[Padraigb]

The Financial Regulator's website quite clearly explains the role that was expected of him.

The site says more than that (I am sure that you have seen the rest, but I quote for the convenience of other readers):

Promoting a Sound Financial System

A fundamental protection for consumers is the solvency and safety of financial institutions. The Financial Regulator has a key responsibility in this area by giving confidence to consumers that their deposits and investments are safe and that their claims can be met. In turn, this contributes to a stable financial system and to the reputation and good standing of the Irish financial sector.
The financial services industry is increasingly global in scale and influence. This poses challenges to both the industry and its regulator. Monitoring global financial and economic developments is an important element of our job.
The focus of work in this area will be on:

• The refinement of a regulatory approach based on risk profile and impact of default;
• Risk assessment, measurement and control techniques in all sectors of the industry;
• Data collection associated with developing better early warning indicators of prudential stress;
• A programme of on-site inspections.

On surface reading, it does seem that the Regulator has considerable responsibilities and associated powers. But I think that if you read it in certain ways, you can argue that there is considerable wriggle room, and I think all that wriggle room was exploited.

I think we can agree that Neary did not do the job that you and I and many others think he should have done. We don't know if he had the capacity to do it; we simply know that he didn't do it.

 

[Brendan Burgess]

I think you are missing the point here completely.

The academic qualifications of someone at a very senior level are of little relevance.

Pat Neary distinguished himself as the Prudential Director of the Financial Regulator before he was appointed. Had I been on the interview panel, I would certainly have chosen him ahead of a 27 year old recent PhD graduate.

Brendan

 

[Afuera]

The academic qualifications of someone at a very senior level are of little relevance.

In general I would agree with you on this Brendan. However if someone's remit is to instill confidence in the financial system then I really feel they need to be able to clearly show to outsiders that they are the best person for the job. Academic qualifications are a good way to do this.

Pat Neary distinguished himself as the Prudential Director of the Financial Regulator before he was appointed. Had I been on the interview panel, I would certainly have chosen him ahead of a 27 year old recent PhD graduate.

If Morgan Kelly's allegations in yesterdays Irish Times are true, how can you explain his decision to include Anglo in the government guarantee against the advice of his staff? With the benefit of hindsight, this was clearly the wrong move to do.

 

[Brendan Burgess]

If Morgan Kelly's allegations in yesterdays Irish Times are true, how can you explain his decision to include Anglo in the government guarantee against the advice of his staff? With the benefit of hindsight, this was clearly the wrong move to do.

Sorry, I pay no attention whatsoever to Morgan Kelly who suggested burning the €1.5 billion instead of putting it into Anglo.

Anyway, the main point I was making was about Pat Neary's qualifications for the job. He was eminently qualified and suggesting that he have a PhD is bizarre. His predecessor had one, but so what? How many regulatory bodies are headed by PhDs?

 

[Purple]

Has anyone any opinions on Maurice Keane, the new Non executive director of Anglo?
I know he was the CEO of BoI but he was also involved in DCC (as well as a number of political appointments such as the National Pension Reserve Fund and the Garda Management advisory group).

Is he too much of an insider to make a difference?

 

[Conan]

I would much prefer an honest and experienced Director appointed (dont know MK) than an honest inexperienced Director. There are lots of people with PhDs I would not have running a raffle not to mind a Bank. We all know the cliche about "unqualified success".
If I am having open heart surgery I would prefer an experienced surgeon rather than one just out of medical school with all the theory . Academic qualifications on their own just prove that you have a good memory and are good at exams. Lots of academics could not convince me today is Wed.

 

[setanta1]

The announcement at the time that Pat Neary was appointed was as follows (underlining added):
"The Financial Regulator today announced that Patrick Neary has been appointed to the post of Chief Executive. The appointment was announced today (Friday, 16 December 2005) by the Chairman of the Financial Regulator, Brian Patterson. Patrick Neary is currently the Prudential Director of the Financial Regulator. He will take up the position of Chief Executive on 1 February 2006 when Liam O’Reilly retires from the post.
“We are delighted to announce the appointment of Patrick Neary to this crucial post. He has extensive experience across the full range of the financial regulatory spectrum. As a member of our top management team he has played a central role in the shape and direction the Financial Regulator has taken since its establishment in 2003”, said Brian Patterson. “Pat is ideally suited to take the Financial Regulator through the next phase of its development.”
He added: “We had a very impressive field of top class candidates for this post from both Ireland and abroad and Pat was the unanimous choice of the selection panel.” The selection panel comprised non-executive members of the Authority and international regulatory expert, Kaarlo Jännäri, Director General of the Finnish Financial Supervision Authority.
Patrick Neary was appointed to the position of Prudential Director of the Financial Regulator in 2003. His responsibilities included the protection of consumers’ deposits, funds and policies. He was previously Head of Securities and Exchanges Supervision and Deputy Head of Banking Supervision in the Central Bank, where he began his career in 1971. He is a fellow of the Chartered Association of Certified Accountants (FCCA)."
[broken link removed]

 

[Askar]

I recall government review of UK's FSA in light of their financial meltdown last year concluded that the office did not have key competencies - so was unable to properly audit banks. Of course, 'principles based' or 'light handed' regulation does not lend itself to needing these basic competencies where banks are self certifying themselves as compliant. However, it does not appear that the cost of running IFSRA is cheap, despite the light handed regulatory approach. Yet another example of paying over the odds for incompetence.

 

[Robin Banks]

I think you are missing the point here completely.

The academic qualifications of someone at a very senior level are of little relevance.

Pat Neary distinguished himself as the Prudential Director of the Financial Regulator before he was appointed. Had I been on the interview panel, I would certainly have chosen him ahead of a 27 year old recent PhD graduate.

Brendan

Yeah, god forbid we'd have put some inexperienced 27 year old in charge. Could have ended up in a right old mess.

Lucky we had someone "distinguished" and "eminently qualified" at the helm.

 

[Purple]

I recall government review of UK's FSA in light of their financial meltdown last year concluded that the office did not have key competencies - so was unable to properly audit banks. Of course, 'principles based' or 'light handed' regulation does not lend itself to needing these basic competencies where banks are self certifying themselves as compliant. However, it does not appear that the cost of running IFSRA is cheap, despite the light handed regulatory approach. Yet another example of paying over the odds for incompetence.

I agree on the price issue (though the Banks pay about half the cost of the IFSRA, no conflict there!), but I would suggest that light handed regulation requires that the regulator is highly competent. Those banging on about light V heavy regulation are missing the point that either system will work if constructed and administered properly and backed up by clear and draconian laws that pummell those that break them. Look at the Enron top dogs or the guys who went to prison because of the Savings& Loans scandal in the USA in the 80's. Who'll give me odds that no one will see prison for destroying the Irish banking system? Our laws in this area are so badly constructed that there’s a good chance that no one broke the law.

 

[Padraigb]

...Our laws in this area are so badly constructed that there’s a good chance that no one broke the law.

Will you accept a quibble? I think you might delete "badly". Our legislators seem to have a mindset such that certain types of behaviour are treated as possibly undesirable, but not really deserving of criminal sanction.

 

[kaplan]

Brendan for PHD's try Ben Bernanke and Mervyn King. The issue is regulate what? What form of bank do we want to see. Narrow banking, traditional banking or slightly deleveraged ? Our prolonged recession, which will last about 6-10 years will define the type of bank we need.

Old style traditional banking carrying a high level of capital between 10-15% with a match deposit/loans book. Solving for risk finance for business will take another form of finance which will not be provided by the banks.

Bring in a regulation and some bankers will figure a way around it - and regulators will race to catch up ...this the nature of regulation.

The answer is it seems first define the banking model,reset the boundaries of permissable risk taking and reregulate. Do this within a nationalised structure and once the banks fit the new model, are healthy and the economy improves refloat them.

Of course stucturing, taking them private into state ownership raises issues around funding and preventing political interference - a good indepenent oversight commission with some international heavy weights (with PHD's) anwerable to the Dail and not just a civil servant might work. Oh and find a way to take to provide small sherholders with an upside - swap ord shares for some form of redeemable perp paying a small rate - redeemable for some ord shares on floatation if that happens - this should take care of the political (voters) risk in nationalising the bigger boys

I'm a fan of Morgan Kelly and others who reflect on what has happened everywhere else in a banking crisis led recession in the last 50 years- the experience is compelling for any who bothers to look. Finland, Sweden, Japan, UK to name but four of seventy individual crisis. The average recession lasted 6 years ! and in almost all cases the banking systems were nationalised or as good as. We are only approaching the end of the beginning

 

[webtax]

Finally saw details of Neary's retirement package.... no comment necessary:

"[broken link removed], the regulator who failed to spot what [broken link removed] was up to at Anglo-Irish bank, was not sacked but allowed to take early retirement with a €390,000 golden handshake of taxpayers' money (that is, before he tucks into his pension of €130,000 a year)."

http://www.independent.ie/opinion/c...s-time-it-might-well-be-terminal-1616759.html

 

[DonDub]

Will you accept a quibble? I think you might delete "badly". Our legislators seem to have a mindset such that certain types of behaviour are treated as possibly undesirable, but not really deserving of criminal sanction.

Lets be honest, there are a number of things Ireland just doesn't do e.g.

1)Sunshine
2)Snow
3)Healthy living
4)Clean streets
4)Good governance
6)Proper planning
7)Competent Regulation in any sphere

.......to name but a few...............

 

[Brendan Burgess]

Finally saw details of Neary's retirement package.... no comment necessary:

"[broken link removed], the regulator who failed to spot what [broken link removed] was up to at Anglo-Irish bank, was not sacked but allowed to take early retirement with a €390,000 golden handshake of taxpayers' money (that is, before he tucks into his pension of €130,000 a year)."

http://www.independent.ie/opinion/c...s-time-it-might-well-be-terminal-1616759.html

Why are you posting this if there is no comment necessary.

A public servant retires and gets the standard package. Of course, no comment is necessary, unless you you want to issue a typical tabloid comment on it?

Brendan

 

[Sunny]

Why are you posting this if there is no comment necessary.

A public servant retires and gets the standard package. Of course, no comment is necessary, unless you you want to issue a typical tabloid comment on it?

Brendan

To be fair Brendan, whats a typical tabloid comment? I am getting sick of senior executives in both the private and public sector being responsible for major cock ups on their watch and then walking off into the sunset with pay offs and pensions that are large enough to ensure they never have to work again while the people left behind get to clear up the mess. I work in investment banking. I understand large bonuses and pay and lack of responsibility. I see it every day. I am also as far from being a trade Union supporter as you can get but even I have had enough of this type of crap.

Neary shouldn't have been allowed to resign. He should have been sacked. And so should all the bank CEO's who are going to resign in the next 12 months. Of course they all have clauses in their contracts that give them pay offs if they are sacked as well so I guess whats the point.

 

[Conan]

Whilst not being overly impressed with actions of the FR, none-the-less Mr. Neary -whether he retired or was fired- is still entitled to his normal Pension benefits after 40 years as a Civil Servant, i.e. a lump sum of 150% of Salary + a pension of 50% of Salary. This is standard Civil Service pension. Whether the Civil Service Pension package is excessive (particularly for higher paid Civil Servants) is a different argument.
The tabloid headlines have certainly been misleading in suggesting that Mr. Neary got some form of "golden handshake". That is clearly not the case.

Fortunately we have not yet introduced hanging for incompetence/oversight (there but for the grace of God etc). But maybe I might make an exception for those guilty of deliberate concealment and misleading of shareholders.....you know who.