Earlier, the Chairman of the Financial Regulator told the committee that the authority is working to ensure that nothing like the Anglo Irish Bank controversy could happen again."It was a different environment". Yeah, no kidding. It was an environment of extreme risk-taking and hubris in banking. Throw in incompetence and greed too. That was the environment.
Jim Farrell said that in hindsight, different action should have been taken but it was a different environment.
He said the previous form of regulation had placed responsibility with banks' boards and senior management but that did not work.
Maybe I'm just being obtuse, but isn't that when you expect the regulator to step in and law down the law? If they won't act then, when it's most needed, why bother with a regulator at all? How much use is it that they're stepping up efforts now when caution is the only game in town and insolvency is a real fear?
You know, I have to add to my last post on the failure of the government and its agents to properly regulate the banks. Yes, the relationship between the bankers and the regulators was too cozy, but I think there's another issue that I overlooked until now. It takes courage to be a financial regulator.
Maybe I'm being unfair, but the weaselly words of Mr. Farrell have me wondering if all we have in the Financial Regulator's office are shy, bookish accountants. Well those people have their place, but at the top of the organization you've gotta have some guts and a bit of aggression. You have got to be able to look the bank chairman in the face and say, "This is wrong. I'm calling in my guys to go through these books with a fine toothed comb and I'm announcing it before the market opens".
That what would have put a halt to the death-defying antics of our banks. Now they've all OD'd on risk and we're all waiting to see which of them will pull through.
