Mismanagement in banking must be held to account

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Mismanagement in banking must be held to account

Criminal liability should apply to the financial sector, writes Colm McCarthy because when financial institutions fail – we all suffer


The Central Bank. Photo: PA Wire
The Central Bank. Photo: PA Wire

After six unbroken years of economic recovery, memories of the financial crash are beginning to fade and the anger to subside. In the early and middle months of 2009, as the bill was presented to every household in the country, the public mood was for a mass lynching of builders and bankers. Ultimately the builders ended up bust and the politicians got lynched too, at the election in February 2011. The bankers, with a few exceptions, sailed off into the sunset, as did their inattentive regulators.

Those bankers who have had to face the courts were not on trial for reckless mismanagement, but for unrelated offences concerning mis-statement of accounts and the alleged concealment of insider loans.

Every bad loan needs a bad borrower, but it also needs a bad lender. The Irish system has done an effective job, courtesy of the Nama machine-gun, in locating and punishing the foolish borrowers. It may even have shot a few innocent bystanders. But there has not been a single prosecution for mismanagement of a bank executive, director or regulator for what was one of the most extraordinary credit binges seen anywhere in recent times. Many of those responsible have not even been publicly identified.

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