It would be wrong to state, as Senator Leyden did “in fairness to AIB”, that it came out with its hands up, admitted everything and behaved well. That is not the case because AIB behaved disgracefully. It misled the public even though it had been caught red-handed. It put the figure of €14 million into the public arena, but it was forced within days to raise the figure to €25 million.
AIB tried to distance its senior staff from this fraud by trying to blame junior staff, but it was forced within days to admit that the behaviour was not exclusively confined to junior staff. I would not particularly trust a so-called “independent” AIB inquiry, given that it has behaved in such a manner. The bank gave an incorrect date. It stated the problems had been ongoing for eight years, but they had been continuing for ten years. It misled the public in that regard.
AIB also said it was sorry that the customers affected are untraceable, but it was forced to admit within a week that at least 80% of the rip-offs, as they have rightly been called, are traceable. In its response to this accusation, AIB misled the public on at least four counts. It displayed a certain arrogance by handling the matter in such an absurd manner. It took a week for the Chairman of AIB to move in to issue a statement, which was so close to countermanding and contradicting the first statement that it must have been a matter of acute embarrassment to the bank.
The events of recent weeks are no more than a symptom of what is wrong with Irish and foreign banks. Nobody could consider Irish banks to be symbols of private enterprise, risk-takers, those who assist industry and those who make a great contribution to the country’s GDP.
We need to ask questions. Who are the banks? For whose benefit are they run? I contend that they should be run for the benefit of the small shareholders who own them, in essence. It is obvious that some small shareholders are owned, in turn, by large shareholders, who use their blocs to support each other.
The banks should be run for the benefit of small shareholders and consumers, but they are not run in such a manner. There is plenty of evidence to suggest the banks have become some sort of runaway monsters that are run more for the benefit of bankers than for the benefit of shareholders or customers.
I wish to cite comments made by the chief executive of Bank of Ireland in an interview last week. The chief executive gave a staggering reply when he was asked about recent events in AIB. He said defensively that we have a wonderful banking system. He chose an extraordinary week in which to make such a remark. It is evident, from his replies to that and other questions during the week, that the chief executive of Bank of Ireland is incapable of saying anything bad about AIB. It is quite extraordinary.
It is likely, in any other commercial rivalry, that a chief executive would take some advantage of the discomfort of another to try to pinch customers. When the chief executive of Bank of Ireland was asked last week about AIB’s problems, he said that we have a wonderful banking system.
What can we derive from the fact that during another interview he described AIB as a very competitive bank? Can one imagine Michael O’Leary adopting a similar approach in respect of Aer Lingus? If Aer Lingus was caught charging too much, would he say “hold it there boys, this is a great airline, they are a very competitive lot”? It just would not happen.
What does it tell one about the difference between the banks and really strong companies with an enterprise ethos? It tells one that the banks automatically protect each other as a knee-jerk reaction. They will not put the boot into each other and will never say a bad word about each other. That was notable last week. While I am open to contradiction about this because I do not read everything that is written about banks, I did not see a single banker put the boot into AIB.
I did not hear anyone from the Ulster Bank, National Irish Bank, the Bank of Ireland, Anglo-Irish Bank or anybody else saying “Come to us, we won’t overcharge you.” Would it not be natural for them to say “We’ll charge you less and we haven’t been charging you these appalling amounts for so long”? They did not say that, however. They were either silent or said things are okay and we have a great banking system. They are dead right – it is a great banking system for them, but not for the customers or shareholders.