Michael Fingleton tells Banking Inquiry: I don’t regret any decisions I took

Before a parliamentary inquiry into Ireland’s banking crisis, he said he took control of his pension investments in the early 1990s and grew the fund 10-fold.

But he refused to disclose his annual payments from the package.

Mr Fingleton, a chartered accountant and barrister, built Irish Nationwide up from a tiny operation to major player in the Irish financial world during his 38 years at the helm of the lender.

He retired in 2009, with the Irish taxpayer having to pick up a €5.4bn bill to recapitalise the now defunct building society.

The former boss denied claims he had run the lender as a personal fiefdom, and claimed 80% of what is written about him is “totally wrong”.

Despite a “perception that I sort of controlled the whole operation”, he said he ensured he did not or could not control it by involving the board in everything, including the lending process.

Of his time in charge he added: “I don’t regret any decisions I took. But I do regret that ... the society had a commercial loan book that was at the time too large.”

If he could do one thing differently, it would have been to stop lending in 2006 and 2007, he told the Oireachtas Banking Inquiry, sitting in Dublin.

Mr Fingleton said Irish Nationwide was primarily a casualty of the global financial crisis started with sub-prime lending in the US, and which dramatically escalated after the notorious fall of Lehman Brothers investment bank in 2008.

In his four decades in charge of the building society, he had lived through three recessions and did not believe the last downturn would be any worse than what had gone before.

He was in “absolute shock” and “bitter disappointment” that the lender had succumbed to a “one in 100 year event”.

“I regret very much, I have and I am continuing to pay the price personally as a result,” he said.

“In particular, I regret it for the society’s employees, shareholders and borrowers who all became casualties of the crisis, and I regret it for the taxpayer and the State who have to fund the deficit.

“I regret that the State and the taxpayer had to pick up the bill for the collapse of the whole financial market, and in particular the banking sector.”

Mr Fingleton pointed his finger at the Government and regulators for not preventing the property bubble which led to Ireland’s cataclysmic crash.

Lenders could have done nothing to stop the fall-out from years of rising house prices, over-development and easy commercial loans, he claimed.

“No individual financial institution could have prevented the property bubble in Ireland,” he said.

“The only entities that could have acted to prevent the property bubble were the regulator, the Central Bank, the Department of Finance or the Government.”

Mr Fingleton said the European Central Bank also had the power to force Dublin’s regulator “to take any necessary action”.

“However, none of them chose to do so,” he added.

The former chief executive told the inquiry that Irish Nationwide was solvent on the night of the infamous bank guarantee in September 2008.

He also turned on Ireland’s bad bank Nama – set up to clean up the mess left by the banking crisis – saying he did not accept their evaluation of losses.

Mr Fingleton mentioned three examples which he claimed showed the toxic assets agency had massively undervalued properties under its control in the UK.

The buildings collectively sold for €443m more than their unchallenged Nama valuations, he said.