I PICKED up the message on the answering machine. The voice was Eamon Dunphy’s. There was a tremor in his voice. “You not there, senator?” he demanded. “I have just seen Paddy Neary, the Financial Regulator, on RTE’s Prime Time.”
The normally fearless Dunphy paused: “I am terrified. I am going to emigrate.”
Dunphy was on the button. The poor Regulator had just been mangled by Mark Little. With a great deal of help from himself.
Public and political confidence in the €260,000-a-year man, who is meant to keep the bank chiefs in line, tanked that night.
Two days later, RTE’s Marian Finucane interviewed Anglo Irish Bank’s chairman Sean FitzPatrick. Sean had bottle to burn in agreeing to go on the air. His bank is in the mother of all trouble. Marian proceeded to mangle him. With a great deal of help from himself.
The interviews with two of Ireland’s banking insiders proved a point.
The two gents were in denial.
The two gents were singing in unison.
Sean FitzPatrick was adamant. This was a global problem. Poor Ireland was caught in the crossfire. Ditto, Regulator Patrick Neary. No one outside their tight circle any longer swallows that fairytale.
Sean had a rush of blood to the head that Saturday. The same evening, the man who has made tens of millions from Anglo share options stunned diners while making a speech in Greystones. The richest banker in Ireland took a swipe at the poor. He believed it was time to tackle the “sacred cow” of child benefit, state pensions, old people on medical cards etc. Developers Sean Mulryan and Sean Dunne were billed to address the same dinner but wisely bowed out. Sean Fitz stole the show with his breathtaking lack of sensitivity. Were we really witnessing this clanger in the same week when the poorest taxpayers had bailed out the richest bankers?
Unlike Sean, the Regulator enjoys merely minor riches. He is only paid five grand a week! His problem is different. He is a muggins in a muddle.
Paddy Neary seems totally out of his depth. In the Prime Time interview, he insisted that Ireland simply had a liquidity problem. Decoded, the banks were solvent, but short- term funding was tough going. Of course, that little flight of fancy absolves him, Sean Fitz and all the other insiders.
Poor Paddy has earned no such absolution. His record is lamentable. Foreign investors believe that he has failed to foster a strong banking system. They freak every time they hear rumours of the fate of dodgy Irish property developers. They are scared stiff of our banks’ commercial property exposure.
Ever since last March, when the Financial Regulator announced a silly inquiry into short-sellers’ activities, he has made a monkey of himself.
Supposedly under severe pressure from the Irish banks, he had announced an investigation into market rumours and dealings. Seven months later the probe has reported nothing. Paddy has egg all over his moustache. First the theatricals, then the silence.
Meanwhile as the Regulator was busy chasing phantom rumours, the Irish banking system was sinking down the tubes.
Earlier, the Regulator had fined both Phoenix magazine and the Irish Times. In another blaze of publicity he took plaudits for tackling two journalists who had failed to put their names to articles recommending shares.
Meanwhile the entire banking system was sinking down the tubes.
Two weeks ago, Paddy — alarmed by the plunge in Irish bank shares — banned short sales. That would keep his friends in the banks happy, steady the markets and gain him more plaudits for “decisive” action.
The next day bank shares rallied. Bravo, Paddy was in the pink. Two days later, prices were in retreat.
Meanwhile, the entire banking system was going down the tubes.
Paddy had tackled market- dealers, rumour-mongers, journalists and short-sellers.
Guess who was untouched? Property developers and bankers — the most lethal combination in the entire economy. Free as birds.
We all know what happened next: last Monday week Irish banks had a close shave with death. Bankers emerged with their hands up.
And last Tuesday, the unfazed Regulator reverted to type. He took another high profile swipe at a soft target. He fined Irish Nationwide €50,000.
The boss’s son had told his clients to deposit money with him as the Nationwide was guaranteed by the Government. Paddy had found another scapegoat: the son of the boss had done something foolish. Clobber him.
Wrong again, Paddy. The entire world knew about Ireland’s guarantee. It was on the front page of the Financial Times. Nicolas Sarkozy, Angela Merkel and Gordon Brown were incensed. But young Fingleton was carpeted for sending an email to clients using it as a marketing tool.
Meanwhile as Paddy busied himself fining the Nationwide, Ireland’s banks were back on the rack.
The Financial Regulator is a cold fortress up in Dublin’s Dame Street. Dealings with its personnel are a nightmare. Its contacts with the public (whom it is meant to protect) are Orwellian.
Last week an employee in its human resources department told me that staff do a 32.5 hour week. Perhaps that is why they do not do enough regulating at the Regulator.
Another mystery is how this underworked empire manages to spend €15,000 a week on business travel. They get pretty shirty when you query this.
If ever I telephone anyone in the fortress and the control freaks in the press office find out, they pounce like the thought police. They telephone or email to stop me making any contact outside controlled channels.
They are Kremlinesque, the most secretive communications operation I have ever encountered. They try to kill stories and suppress the flow of information to the public. They obfuscate.
Initially, when I challenged them about their less-than- transparent practices, they asked me to lunch. Alas, my boredom threshold barometer would explode. I would rather sup with Coco the clown. Or even AIB’s Eugene Sheehy.
Their annual report fails to give any information about the directors — all political appointees. Names only. They could all be escaped convicts, hermaphrodites or illiterates for all we are told. And these are the guys meant to judge the suitability of board members of the main banks!
Last year the Regulator defined its role as twofold:
One: “To encourage prudent behaviour on the part of lenders and so to protect depositors.”
Zero out of ten. Ask Ireland’s depositors, in peril under the tender care of the Regulator until Brian Lenihan and the taxpayer rode to the rescue.
Two: “To ensure borrowers take account of future risks.”
One out of ten. Ask Ireland’s happy-go-lucky, deeply grateful property developers.
The next time you hear a promotion for a new financial product blaring out on the airwaves reassuring prospective punters that a financial product is “regulated by the Financial Regulator”, head for the hills. Or, as Eamon suggested, emigrate.
Tell the promoter that you will buy the product — provided Paddy’s fingerprints are nowhere near it.