Nyberg indicts banking sector: Dail inquiry needed to name and shame, says IBOA

Issued : 20 April 2011

"The Nyberg Report on the Republic's banking crisis represents a further indictment of the fundamental failings in the banking industry in recent years," said Larry Broderick, General Secretary of IBOA The Finance Union.

"While Peter Nyberg does not identify specific individuals either for their failure to meet their obligations to carry out effective oversight or for their willingness to engage in imprudent practices, it is clear from his analysis that we were witnessing a systemic breakdown in Irish banking which now requires fundamental reform.

"IBOA's own vision for change which was adopted at our Delegate Conference last week takes on even greater urgency in the light of the Nyberg report," he said. "We aim to engage with Government on a number of initiatives for reform, including the following:

  • The culture of banking should be radically changed to restore the fundamental values of prudence, integrity and stability, so that service to customers becomes the key priority rather than the pursuit of excessive profits;
  • The governance of the banking should be reformed by ensuring greater diversity on boards, including employee representatives; and by installing a charter for whistle-blowers with appropriate legal protections;
  • Those who brought financial institutions to the brink of collpase should be held accountable for their actions;
  • Remuneration practices within banking should be transformed by replacing sales-driven bonuses and awards based on target-driven performance criteria, with a new salary structure that prioritises skills, professional development, customer service, experience and judgment based on integrity and prudence.
  • The regulatory and compliance environment should also be strengthened.
  • Staff should not be scapegoated for the mismanagement of the industry: if any job reductions are necessary, they should be implemented on a voluntary basis, with terms in line with recent industry norms," said Mr. Broderick.

IBOA The Finance Union will be making representations on these issues to Government, the regulatory authorities and individual financial institutions in the coming days.

The IBOA leader has also backed the call for the establishment of a Special Dáil Committee of Inquiry into the banking crisis. "This special committee should be empowered to call all of the key participants in the banking sector to appear under oath to clarify their precise role in the crisis so that lessons may be learnt to ensure that we never have to experience such a catastrophe again," he said.