Tánaiste Describes NIB Report as Deeply Disturbing

The Tánaiste and Minister for Enterprise, Trade & Employment, Mary Harney TD has today (Friday 30 July, 2004) described the findings of the Report into the affairs of National Irish Bank as "deeply disturbing".

"The Report is an astonishing catalogue of systematic overcharging and tax evasion," she said.

She said: "The vast majority of people rely on the banking system to conduct their everyday affairs. When we give our money to the bank, the least we are entitled to is an assumption that it is safe and that it will be dealt with honestly. It is simply unacceptable that one of the countries leading financial institutions should breach that trust and behave in this manner."

"What went on in NIB was not some minor oversight. What I find most shocking is the culture which prevailed at the highest level in the organisation which allowed and even encouraged wrongdoing. Too many people, and indeed the bank itself, saw themselves as above the law and felt that they could simply get away with this."

She continued: "People who gave their money to NIB now find that that money was stolen from them. It is fair to acknowledge that the bank are committed to repaying that money but that is no more and no less than people are entitled to expect."

She continued: "I welcome the fact that the High Court has decided to publish the Report and to bring these findings into the public domain. By exposing what went on in NIB we offer the clearest indication possible that we will no longer tolerate this sort of behaviour in our society."

The Tánaiste paid tribute to the work of the inspectors, Mr John Blaney and Mr Tom Grace and their team.

She said: "Their doggedness in pursuit of the truth, their determination to succeed and their diligence and expertise in unravelling the facts has clearly done the Irish people some service. Furthermore, they have set out their findings in a concise and logical manner that is a model of clarity. They have also been painstaking in ensuring that those named in the report would have the opportunity to have their say."

"This has been a long process but we are dealing with issues which the Court has described as being of the utmost gravity. It was more important that it be done fairly and properly than that it be done quickly," the Tánaiste added.

She went on to acknowledge the reaction of NIB to the findings in the report. "It is simply unacceptable that a licensed bank in this jurisdiction should so flagrantly flout the law, abuse customers' trust and promote tax evasion over many years. However, I welcome the fact that the new management of NIB have expressed genuine remorse for what happened in the past and seem determined to put in place the necessary measures to deal with all matters identified by the inspectors and to remedy any deficiencies in their internal controls and indeed that that it has taken steps both to pay its dues to the State and its customers," she said.

And she added: "It is important for NIB and for its many staff that we move on from this episode behind us and allow the bank re-establish its position and reputation within the financial community ," she said.

The Tánaiste said that it was now a matter for the relevant regulatory and enforcement authorities, including the Director of Public Prosecutions and the Courts themselves, to decide what sanctions should be sought against those who are identified as having engaged in these activities.

"I will leave the issue of sanctions to those whose job it is to consider such matters. For Government and for the legislature, the most important issues now are to carefully consider the systematic failures outlined in the Report, identify the lessons to be learned and demonstrate a willingness and determination to implement and enforce a regulatory environment that makes it more difficult, if not impossible, for this sort of thing to happen again," the Tánaiste said.

"It is doubtful if, a decade ago, when these activities were going on, we would have had the will or the courage to open the affairs of a major financial institution to such minute public scrutiny. That we can do so today is evidence of a sea-change in our culture.

"It is a change that is reflected also in the transformation in our regulatory regime. In recent years this Government has fundamentally restructured the enforcement of company law and put in place a new Director of Corporate Enforcement on an independent and properly resourced basis; we have put in place structures to review company legislation on a regular basis to ensure that Ireland is to the forefront of best international practice; we have radically overhauled our system of financial regulation through IFSRA which put the interests of the consumer very much to the fore; we have thoroughly revamped the rules and controls in the auditing and accountancy profession; and we have reinforced the investigative and enforcement powers of the Revenue Commissioners."

"These reforms are evidence of this Government's determination and commitment to stamp out wrongdoing and corruption, to provide a fair and just society, to ensure a regulatory environment that is among the best in the world."

"If detailed analysis of the findings in this Report suggest that further reforms would assist our effort then this Government will not be found wanting," the Tánaiste concluded.

ENDS/ETE1250