Financial Regulator warns of legal difficulties in sacking bankers
Financial Regulator Matthew Elderfield has today warned about potential legal challenges over moves to sack incompetent bosses at bailed-out banks.
The banking watchdog is planning an investigation into the “fitness and probity” of all directors of lenders in Ireland who were recapitalised by the taxpayer.
But Mr Elderfield signalled he was expecting possible court action against his new investigative powers to look into directors’ track records in the run up to the financial crisis.
“I don’t underestimate the legal challenges that we might have in using our new powers,” he said.
“But we must be prepared to make difficult judgments on fitness and probity and it is right that we should start with this group.”
Speaking at the annual MacGill Summer School in Glenties, Co Donegal, Mr Elderfield said there would be no need to carry out his investigation if all bank directors who were in their positions at the time of the State banking guarantee stood down together.
Earlier this year, Finance Minister Michael Noonan demanded a clear-out by next year of all bank chiefs who headed up bailed-out lenders before the crash.
“This is an understandable initiative and will help provide a clean break with the past,” said Mr Elderfield.
“If all those involved take up the minister’s request to act in the public interest then there will be a smooth succession process and obviously there should be no need to conduct our regulatory reviews.
“But we are gearing up to consider initiating statutory investigations if they are in fact required, in order to establish the necessary facts to make individual judgments.”
