Banking inquiry can draw lessons for future by learning from past - IBOA
Issued : 7 September 2015
“The Oireachtas Banking Inquiry will serve a vital public service if, as a result of its investigation into the banking crisis, it can draw important lessons for the future designed to improve banking standards and strengthen safeguards for all stakeholders,” declared IBOA General Secretary, Larry Broderick.
Commenting on the publication of his submission to the inquiry – which provides a view of the crisis from the perspective of those working in the major retail banks, Larry Broderick said:
“The key to avoiding a repetition of the mistakes of the past is to transform the culture of Irish banking – which is still largely unchanged. The culture shift we need is to prioritise service to customers – rather than the achievement of sales targets – as the foremost principle for every financial institution.
“Treating customers with respect leads on to treating bank workers properly and to developing a deeper sense of the banks’ wider responsibilities to the community,” said Mr. Broderick. “It also means more inclusive governance structures and genuine engagement about how financial institutions can contribute to sustainable economic and social development. These broader strategic questions seem to have been lost amid the immediate rush to return to profit as quickly as possible.
“The Banking Inquiry has an important job to do in trying to identify the circumstances that led to the unprecedented crisis in Irish banking.
“Like their counterparts throughout the economy, thousands of ordinary bank workers have suffered job losses since 2008 while most of those who remain have experienced a major dilution of their pension entitlements, the removal of contractual entitlements and discretionary staff benefits, the implementation of longer working hours, major changes in job roles, substantial restructuring and a freeze on pay increases which has only just begun to thaw.
“Customers have also suffered a deterioration in the level of service being offered to them, as banks have sought to rebuild capital as quickly as possible in order restore profitability with a view to returning to fully privatised status at the earliest opportunity.
“Although there is a widespread recognition that things went badly wrong in Irish banking, the evidence from many of the witnesses appearing at the Banking Inquiry seems to suggest it was due to bad luck rather than bad judgment or bad practices. And if this view becomes the accepted wisdom, then we will have learnt nothing,” said the IBOA leader.
“Even though the inquiry is operating under many constraints on its capacity to explore issues as freely as it may wish, no such limits should apply when it comes to making recommendations for the future – which, in many respects, may be the most important facet of the inquiry’s work,” he concluded.
Note: Larry Broderick’s witness statement is available on the Banking Inquiry website by clicking this link.