Fingers: it’s a trumped up inquiry looking for scapegoats

Ex-banker hits out at probe

MICHAEL Fingleton has branded an inquiry into the collapse of Irish Nationwide Building Society as ‘artificially trumped up’.

The former chief executive of INBS claimed yesterday that the investigation examining the governance of the lender was set up to ‘deflect attention’ from the financial regulator, the Central Bank, and the Department of Finance.

The 2010 collapse of the building society reportedly cost taxpayers more than €5billion, due to a massive State bailout it received. Mr Fingleton, in an opening statement to the inquiry in Dublin yesterday, said it was a ‘cynical exercise seeking scapegoats’ and that the regulator had full knowledge of the activity of INBS ‘at all times’, including its commercial lending.

The former managing director of the now-defunct building society said that INBS had reined in its commercial lending in late 2007 before regulators stepped up their interest.

He said that from late in 2007, INBS managed to reduce its exposure by €1billion in the space of a year and that the authorities did not seek to protect the financial system ‘until it was too late’.

Mr Fingleton, who governed INBS for 38 years until 2009, has denied that he was accountable for any of seven alleged ‘suspected prescribed contraventions’ at the company that are the subject of the inquiry.

RTÉ reported that Mr Fingleton, who appeared before a threemember panel led by former solicitor Mary Shanley, claimed he’d been denied access to interviews with employees from the regulator conducted for the inquiry, which he said could offer important knowledge of the period under review.

Mr Fingleton, dressed in a dapper pin-striped suit, yesterday said it was clear from the Central Bank interviews with 86 former INBS staff that regulators were ‘only after the big fish’.

The former INBS chief, who turns 80 next month, also reportedly claimed the staff were offered immunity as they were advised to ‘dish the dirt’.

He said there had been no allegations made personally to him during the review period that he was in breach of any regulations.

He said that during audits and reports none of the issues currently being raised was communicated directly with him when he was head of INBS. He told the inquiry: ‘We had a very informed board; they didn’t just meet once a month, they had a detailed knowledge of the working of the Society.’ Mr Fingleton, who was known as ‘Fingers’ in the banking community, was also critical of the Central Bank in his address to the inquiry. He reportedly said the Central Bank had information and reports available to it in 2006 that it failed to communicate to financial institutions. He claimed this could have had a significant effect on the stability of banks’ lending in the lead-up to the financial crisis.

The current focus of the inquiry is on the role of INBS’s credit committee. Mr Fingleton denies being a member of that committee; however, this is disputed. Former INBS secretary Stan Purcell said Mr Fingleton was one of the most senior and permanent members of that committee.

Mr Fingleton had previously asked Court of Appeal judges in June to scrap the inquiry because he is too old and suffers from ‘eyesight deterioration’ that might cause him trouble reading over 110,000 documents.

‘They had detailed knowledge’