I'm hopping mad over this.

Yes, I know it seems he didn't technically break the law, but the spirit certainly. He should be in jail.

BTW, this couldn't happen in a credit union. A bank provides a list of loan balances of directors at year end to the regulator.
A credit union must provide a list of loan issued to directors (and all staff) over the past 12 months to the regulator.
So, Fitz's "warehousing" tactic wouldn't have worked.

It is typical that the regulation is stricter for credit unions than for banks. My understanding is the banks lobbied Cowen for more liberal policies for themselves while simultaneously lobbying for stricter regulations for the credit unions (which they regarded as a threat).

And, if Anglo were to go bust the credit unions would suffer, as many have investments with Anglo.

But Anglo will no go bust. I'm certain that it will have to nationalised this weekend.
The taxpayer has to foot the bill for this fraudster's gambling.

This also reflects badly on

Irish Nationwide
The Regulator
Our former ministers for Finance, Cowen and McCreevy.
The Irish Banking system as a whole internationally.

eoinmn wrote:

Yes, I know it seems he didn't technically break the law, but the spirit certainly. He should be in jail.

He behaved in an unprofessional manner. What he did was ill considered, unethical and brought his profession into disrepute. If he belongs to any professional body he should have to face disciplinary proceedings. If he sought to conceal then there may be some meat in this. I think it could well be worth a proper investigation, it needs to be investigated.

I was glad to see, just now, a clip of Dan Boyle in the Seanad saying there should be a cull of banking executives.
I wish Dan was at cabinet, he's a very good finance spokesman.

Auditor #9 wrote:

The Regulator can't stay now - the Finance Ministry has been deceiving the people in fairness. When your Regulator is broken things can go very badly wrong afterwards.

Indeed, time for the Regulator to give up the charade and go.

johnfás wrote:

The regulator was a banker... what do you expect. I
hate this nonsense that if we replace the boards of these banks we will
end up with a second rate team. Most Chartered Accountants in any
substantial firm could run these places far better than the current
crowd.

I want a regulator who is an engineer, a plumber, an architect, a medical doctor, or anything rather than a banker.
The kind of person who knows so little about the field that he will soil his or her pants when offered the job.
Because what we need is someone extremely conservative and yet ruthless.

Effectively there is no regulator - this feckin economy is driving around without a radiator thermostat or something.

If Anglo go bust eoin, wouldn't the magic "bank guarantee" not provide all the money ?

Auditor #9 wrote:

If Anglo go bust eoin, wouldn't the magic "bank guarantee" not provide all the money ?

Youngdan was right Audi, Cowen will need a magic arse!

Just reading the Pin now (was internet deprived today) that Fitzpatrick had 70m of shares in Anglo. And the rest of his largesse in (Docklands perhaps) property.

Sorry to be banging on about credit unions but,
I've just been told that in most credit unions the auditor will receive a full statement (detailing every transaction over the last 12 months) for each director on the 30th of September.

eoinmn wrote:

Sorry to be banging on about credit unions but,
I've just been told that in most credit unions the auditor will receive a full statement (detailing every transaction over the last 12 months) for each director on the 30th of September.

Bang on away about Credit Unions - I suspect they're all linked somehow. I still can't picture what will happen if a bank like Anglo goes pear shaped now - I can't really imagine the fallout bar the job losses. What happens during receivership or whatever that process is ? The Credit Union is a big and important customer so it could affect a lot of people directly and I fear it might not just be in a reduced or non-existent dividend. I still haven't pictured it fully in my head.

The 30th September ?

Yay! Blood on the floor! This is great. Now that we've gotten some heads rolling in Anglo it's on to Bank of Ireland, IL&P and AIB. At least a dozen senior executives must be sacked for bringing the financial industry into crisis along with the Financial Regulator. They should be run from their offices for their negligence and incompetence and made an example of. They should then be replaced with people who know what they're doing and can manage these banks more effectively.

Auditor #9 wrote:

The 30th September ?

Credit Union Year End.

Ard-Taoiseach wrote:

Yay! Blood on the floor! This is great. Now that we've gotten some heads rolling in Anglo it's on to Bank of Ireland, IL&P and AIB. At least a dozen senior executives must be sacked for bringing the financial industry into crisis along with the Financial Regulator. They should be run from their offices for their negligence and incompetence and made an example of. They should then be replaced with people who know what they're doing and can manage these banks more effectively.

How can we know these new tools won't take the same brown envelopes out of the same bottom drawers as the last crowd of crony scum ?

Two questions are coming up now on the Pin -

Are the auditors - Ernest and Young - due for a good questioning on this ?

Who was Fitzy swapping the 87 million with ? Surely they could have some news for the world as well.

Isn't the Pin and the IT saying it was Irish Nationwide?

eoinmn wrote:

Isn't the Pin and the IT saying it was Irish Nationwide?

Thanks.

Quote :

The transfer of Mr FitzPatrick's loans was discovered by the regulator during an inspection of Irish Nationwide in January.

Mr FitzPatrick has also resigned from the boards of Smurfit Kappa, Aer Lingus, food group Greencore and investor, Gartmore Irish Growth Fund.

Mr FitzPatrick has been replaced as Anglo chairman by Donal O'Connor, a former managing partner of PricewaterhouseCoopers and a non-executive director of the bank since June.

http://www.irishtimes.com/newspaper/finance/2008/1219/1229523104812.html

The regulator should resign and give back his salary for this year. A dozen decent people could have been employed while he was asleep at the wheel.

The Government should eject him next week. He's had plenty of good Christmasses now he should finally go and f* off where he can be useless without doing any damage.

Auditor #9 wrote:

Ard-Taoiseach wrote:

Yay! Blood on the floor! This is great. Now that we've gotten some heads rolling in Anglo it's on to Bank of Ireland, IL&P and AIB. At least a dozen senior executives must be sacked for bringing the financial industry into crisis along with the Financial Regulator. They should be run from their offices for their negligence and incompetence and made an example of. They should then be replaced with people who know what they're doing and can manage these banks more effectively.

How can we know these new tools won't take the same brown envelopes out of the same bottom drawers as the last crowd of crony scum ?

Because the fact that the old crowd were sacked would make them much warier about doing it for a second time. If their actions carry a penalty such as this, it will have a disciplining and restraining influence on the new upper echelons of our banking institutions. I say sack them. We have to clean house.

Who was it sold the Credit Unions xx millions worth of bonds with no cash-in date and had to settle with them a few months back?

I still can't get my head around why someone would have a constant loan of 75 million and never pay any of it back and apparently have it in Anglo shares? is that the collateral he was talking about? Was he paying a bit less interest than he was getting dividends and just picking up a margin?

johnfás wrote:

The regulator was a banker... what do you expect. I hate this nonsense that if we replace the boards of these banks we will end up with a second rate team. Most Chartered Accountants in any substantial firm could run these places far better than the current crowd. You don't need to understand complex derivatives to run a bank, all you need to understand is that if something is so complicated that 95% of people, even economists, can neither understand nor trace an investment, then it is a bad business move to engage in it. I learnt that in Junior Cert Business Studies.

JF I see where you are coming from.However there are varying levels of aptitude and ability amongst the Chartered Accountancy profession.Ditto the Legals.It is fair to say that the professional competency within these areas is not generic.
Indeed two of the recently departed from Anglo,Messrs FitzPatrick and Drumm are Chartered accountants by profession.

powderfinger wrote:

johnfás wrote:

The regulator was a banker... what do you expect. I hate this nonsense that if we replace the boards of these banks we will end up with a second rate team. Most Chartered Accountants in any substantial firm could run these places far better than the current crowd. You don't need to understand complex derivatives to run a bank, all you need to understand is that if something is so complicated that 95% of people, even economists, can neither understand nor trace an investment, then it is a bad business move to engage in it. I learnt that in Junior Cert Business Studies.

JF I see where you are coming from.However there are varying levels of aptitude and ability amongst the Chartered Accountancy profession.Ditto the Legals.It is fair to say that the professional competency within these areas is not generic.
Indeed two of the recently departed from Anglo,Messrs FitzPatrick and Drumm are Chartered accountants by profession.

My point is that there are many professional people out there who could do equally as good a job as them. No professional person is immune from corruption but there are plenty of professional people who have not had the involvement with the banks but have doneso with many other large companies and thus would have exactly the same aptitude to run them. Obviously professional competency is not generic but lets look at the businesses and industry in this country which do work and move some of them into the banks. If you can run at board level Smurfit Kappa, or Primark, or CRH, or Ryanair, or Aer Lingus, or Elan, or IONA, or Kerry Group or serve as the senior partner who audits any of these companies or the senior legal advisor who looks after their affairs you are quite competent to run a bank. There are quite literally hundreds of such people. We have a plethora of people in this country who are competent to take over these bank boards and the bankers who suggest otherwise are merely self serving and disengenuous.

I don't think the perpetrators had any special abilities or intelligence. Wasn't it Galbraith who said that everyone is clever in a rising market?

I wouldn't rush to assume that no banking expertise is needed to run the banks, in fact I think that is a very dangerous assumption. I deal with enough good professionals of various kinds to appreciate the different knowhow and skills they have. Maybe we could go shopping for expertise in someone with proven form in the Swedish and Finnish banking debacles.

At this stage in Ireland the most important thing in relation to AIB and other banks seems to be that we have put an horrific chain around our necks with the Banks Guarantee and I stand over my original view that the Guarantee was a disastrous move. It has now come out that Fitzpatrick moved his personal assets out of the Bank immediately before the Guarantee. How many others did that?

Mary Hanafin was talking on RTE Radio lunchtime and repeatedly denied that there was a need to nationalise the banks. The government line seems to still be that the banks should "come forward with proposals" i.e. dictate the terms on which the tax payer makes a present to share holders (who it no appears substantially consists of bank management) whilst control in probability would go to asset stripping equities firms. There is no way, particularly with the Guarantee in place, that Government would have sufficient control and leverage to require the Banks to release the money given to them in the form of credit to ordinary customers. On form, they would use it themselves for their personal enrichment and protection of their personal assets.

This imo would be an outrage. It is a "do nothing" option for a do nothing government, that would maximise the

It is hard to see why Anglo Irish deserves any support whatsoever. It should be let go down, with a hardship fund to protect people losing homes and businesses as a consequent of its bankruptcy. But does the Guarantee not mean that we are liable for all losses in the event of bankruptcy?

The other Banks should be nationalised by means of the State taking a majority
/preferential shareholding.

The idea of co-op banking sounds more and more attractive as time goes by.

I know 4 people who are directors of publicly listed Irish banks... none of them are professional bankers. I know one person who has been appointed to the board of one of the banks under the State guarantee scheme, he is not a professional banker either.

You need banking expertise to be head of the risk management committee of a bank who reports to the board. You don't need banking expertise to be a director of the bank, you need sound business and strategic development expertise. You also need to be able to spot rodents and know how to kill them.

Quote :

It has now come out that Fitzpatrick moved his personal assets out of
the Bank immediately before the Guarantee. How many others did that?

Lots, I would imagine.

Quote :

johnfás wrote:

I know 4 people who are directors of publicly listed Irish banks... none of them are professional bankers. I know one person who has been appointed to the board of one of the banks under the State guarantee scheme, he is not a professional banker either.

You need banking expertise to be head of the risk management committee of a bank who reports to the board. You don't need banking expertise to be a director of the bank, you need sound business and strategic development expertise. You also need to be able to spot rodents and know how to kill them.

Quote :

It has now come out that Fitzpatrick moved his personal assets out of
the Bank immediately before the Guarantee. How many others did that?

Lots, I would imagine.

With all due respect to your friends (who I'm sure are decent people), given the form of the people who appointed them, that does not reassure me a bit.

There's lots of decent people on the boards of the banks. Its the Chief Execs you need to worry about they have a huge propensity to keep information from the board. Happens all the time and you see it a huge amount in the Commercial Court and upon winding up of companies. Vast majority of directors of public companies are non executive and can only make judgement on the basis of the information before them. I'd imagine the vast majority of the board hadn't a notion about Fitzgerald's loans - why not? - because it wasn't disclosed to them and they cannot control the agenda at board meetings.

johnfás wrote:

powderfinger wrote:

johnfás wrote:

The regulator was a banker... what do you expect. I hate this nonsense that if we replace the boards of these banks we will end up with a second rate team. Most Chartered Accountants in any substantial firm could run these places far better than the current crowd. You don't need to understand complex derivatives to run a bank, all you need to understand is that if something is so complicated that 95% of people, even economists, can neither understand nor trace an investment, then it is a bad business move to engage in it. I learnt that in Junior Cert Business Studies.

JF I see where you are coming from.However there are varying levels of aptitude and ability amongst the Chartered Accountancy profession.Ditto the Legals.It is fair to say that the professional competency within these areas is not generic.
Indeed two of the recently departed from Anglo,Messrs FitzPatrick and Drumm are Chartered accountants by profession.

My point is that there are many professional people out there who could do equally as good a job as them. No professional person is immune from corruption but there are plenty of professional people who have not had the involvement with the banks but have doneso with many other large companies and thus would have exactly the same aptitude to run them. Obviously professional competency is not generic but lets look at the businesses and industry in this country which do work and move some of them into the banks. If you can run at board level Smurfit Kappa, or Primark, or CRH, or Ryanair, or Aer Lingus, or Elan, or IONA, or Kerry Group or serve as the senior partner who audits any of these companies or the senior legal advisor who looks after their affairs you are quite competent to run a bank. There are quite literally hundreds of such people. We have a plethora of people in this country who are competent to take over these bank boards and the bankers who suggest otherwise are merely self serving and disengenuous.

Thanks for clarifying Jf.Another school of thought on corporate Irelands success models may yet emerge.The levels of debt taken on to fuel m+a activity in expanding boom times could leave a residual and costly aftertaste.The mantra of double-digit growth for growths sake may yet look reckless "going forward".
The CEO of Smurfitt Kappa,Mr. Gary McGann sits on the board of Anglo Irish Bank if I'm not mistaken.

This whole episode illustrates why the bank gaurantee is not just nonsense but in my view criminal megligence on the part of the government. This is now a zombie bank and needs to go to the wall with some form of minimum protection for depositors. The board should be investigated and charges, if necessary, should be brought. The bank itself must be culled.