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Gospel According to Matthew

Posted on: April 18th, 2010 1 Comment

EVEN Arthur Morgan was dazzled by Matthew. The former IRA activist, now Sinn Fein TD for Louth, leaned over at the Oireachtas committee last week and whispered words in praise of Matthew Elderfield.

The new Financial Regulator was fielding questions about the banking mayhem.

I have to admit it, I like Arthur. Not my political cup of tea, but a repentant charmer. Despite his charm, the image of Arthur being arrested on Carlingford Lough by the British army back in 1977 is never far away whenever I meet him.

Arthur was caught on board an IRA boat carrying an arsenal of weapons. The weapons were meant to cause devastation for the British army.

Arthur spent seven-and-a-half years in Long Kesh for his trouble.

“But Arthur,” I replied mischievously, “Matthew is a Brit.”

“We are on the same side on this one,” replied the twinkly convert. “When are we having a cup of tea?”

The sooner the better. We will have plenty to discuss, apart from the national question. In particular the new Ireland of Matthew Elderfield

Matthew looked and sounded like Arthur’s nemesis last Wednesday. Every inch the new arrival from Bermuda — Britain’s oldest colony — he was tall, fit, tidy, polite and perfectly groomed.

And Arthur, the republican ex-prisoner, loved him.

The banking crisis had — for a day — united the warring factions in Ireland.

It is rare that anyone receives such a warm welcome as Matthew did from the TDs and senators.

He might have expected a roasting. Here was the bogeyman threatening to sink Quinn Insurance and its 5,600 jobs. Border-county deputies swarmed into the room to question the watchdog who was taking a hardline over Sean Quinn’s serious solvency breaches.

We had all been screaming for tighter regulation. At the first sign of it touching their own backyard, the representatives from the hills of Cavan came down from the mountains, protesting in their droves.

Regulation is always for someone else.

No one can blame the TDs. Their job is to protect the livelihood of their constituents. But that is not Matthew’s role. His is to defend Quinn’s policyholders.

Matthew’s first task is to ensure that his office is independent of the politicians who would love to twist his arm. His second is to prove that he is independent of the banks who would like to send him back to Bermuda.

Not an easy task in the village of Ireland.

On Wednesday, he risked contamination by the assembled group of politicians.

First he laid down the ground rules. He would not be speaking about Quinn.

Then he proceeded to break them by being extra helpful to a persistent Senator Diarmuid Wilson, when the Fianna Fail man from Cavan quizzed him about Sean the sandman and his solvency.

Matthew disarmed the critics with his openness. He shot straight from the hip: if Quinn came up with the money he would change his attitude. Otherwise, as far as Matthew is concerned, Quinn Insurance is insolvent. He was not for blinking.

A day later Quinn blinked. He opened the gates to Matthew’s administrators. The game was up. It was a runaway victory for Matthew.

I wonder how poor Arthur felt about that. Sean Quinn, from a nationalist family in the border counties, had been bested by a Brit from Bermuda. In the old days he would have advised Quinn not to recognise the court.

Matthew gave no quarter to the TDs who had come to lobby him in front of the cameras. He knew that he was addressing a wider audience; that his replies would be on the Nine O’Clock News on RTE; that he had a mandate to serve the nation, not just the border counties.

First, he offended Fianna Fail sensitivities by partly blaming “home-grown” factors for the banking armageddon. By implication, the Irish Government was in the frame.

Next, he offended Fine Gael by saying that Anglo Irish Bank should not be wound down rapidly, because it would be too expensive. In a stroke, a pillar of the opposition party’s banking policy was brushed aside.

Spitting in the eye of both big parties is not a bad way to assert your independence.

Having successfully distanced himself from the politicians, Matthew’s second task was to put clear water between the regulator and the bankers. No doubt he will not now be wined and dined by the Irish Bankers Federation, like his hapless predecessor was.

He was careful not to name names, but he dumped fairly and squarely on Pat Neary and his friends in the bankers’ boardrooms. Addressing the issue of corporate governance he insisted ominously that “recent boards need to raise their game”.

Down in the House of Lords at Bank of Ireland’s College Green sanctum you could have heard a glass of champagne drop. At AIB’s Ballsbridge Bankcentre the insiders were no doubt watching the watchdog on the web.

Bank directors are about to come under the watchdog’s scrutiny: “The proposals we publish shortly,” Matthew uttered ominously, “will set more exacting standards for boards of directors of banks and insurers, and will include requirements relating to board composition and impose restrictions on the number of directorships that can be held at one time”.

Earlier he had even dropped the dark words: “remuneration guidelines.”

He revealed that bankers would be forced to sit interviews. The old boys club will be closed. Bankers pay will be on the line.

Matthew has the pay credentials. He has given up a job at the Bermudan monetary authority, taking a pay cut from €533,000 to his present pittance of €340,000.

Perhaps he could begin by interviewing all the current time-servers in AIB and Bank of Ireland, the guys still squatting on their board perches, who never put their hands up and protested that the property frenzy was madness.

Then he could turn to the recent appointments at the three big banks.

Is he going to ask those favourite sons who inherited the jobs of the departed — Richie Boucher at Bank of Ireland, Colm Doherty at AIB and Kevin Murphy at Irish Life & Permanent — if they ever raised their voices against the prevailing culture that has left us nearly bankrupt? There is a need for the old question: “What did you do in the war, Daddy?”

All three were key insiders when they succeeded to the banking thrones last year.

Unlike Matthew, they were all “home-grown” successors.

His ability to clean up the big three will be tested when he begins to lock horns with the culture that still rules within the three-headed hydra. Heads have been cut off — but have merely been replaced by clones.

Even closer to home, Matthew will need to tackle the rotten culture he has inherited inside the regulator itself. Neary took the rap, but one scalp at the Financial Regulator and a couple of token victims from each bank does not change a culture.

His wonderful drive for dramatic changes betrays an unspoken conviction that Neary was presiding over a shambles. Matthew was shocked by what he found when he landed in Dame Street. He has demanded — and been given — an extra 150 staff. He is seeking another 200.

If Matthew is good enough for Arthur, he is good enough for me. Welcome to the new Republic.