Ireland Goes Bust

[Magda Hassan]

• WhistleblowerIRL
  
  17 November 2010 9:06AM
  
  Ireland is having relinquish its hard-fought sovereignty as a result of a complete breakdown of banking law enforcement and repeated attempts to cover-up the ineptitude of the government and the regulator.
  I am the person referred to in Senator Norris' statement below. Norris is an independent senator with no party affiliation.
  I resigned from my position as the risk manager of a foreign bank operating in Dublin in 2007. We breached minimum liquidity requirement by BILLIONS of Euro on a regular basis. I made sure the Regulator was notified at least on one such occasion.
  <b>In his statement to the Irish Seanad (Senate) in February this year, Senator Norris concluded:
  "...I would like her [Deputy Brady] to take the message back to the Minister for Finance, Deputy Brian Lenihan, that there is ministerial responsibility in this matter.
  This is a grossly serious matter which has been reported to the Financial Regulator. A man has lost his job as a result. He honourably resigned. The degree of breach was 40 times the accepted margin. This is a disaster. If we are not prepared to face the issue and investigate it when it has been laid before the House, there is absolutely no hope for the financial system or its reputation worldwide.
  ... I have made very clear requests that this matter should be examined. How can the Financial Regulator investigate himself? He was in breach of his responsibility. That is the first point.... It is not too much to ask in this Parliament that this should happen. I want the process to start tonight.... ."
  </b>
  I have brought the matter to the attention of several senior TDs (MPs) and Senators at all the major political parties; alas, silence prevails.
  Whilst the catastrophic over-night breach that I had reported to the Regulator could have been theoretically remedied immediately, it is virtually impossible for it to have been a 'once-off' event, had we been abiding by the terms of our banking license. Chaos prevailed and by the time the Regulator's team arrived for a scheduled audit, they made sure that communication with the London consultancy whom I had brought-in to sort out the mess, was promptly cut-off. By then, I was no longer attending the office, but was on 'garden leave'.
  Although my position had been confirmed by the bank's board of directors only shortly before my resignation, and my resignation clearly stated that it was due to integrity issues at the bank, the Regulator's team made no attempt to contact me then, or at any time since then.
  The official protocol of Senator Norris' statement is available under 'Financial Regulation' (3rd from the end of the list) at:
  http://debates.oireachtas.ie/DDebate.asp...x=743#N743
  The workings of Ireland's Financial Regulator are best displayed in the following example from the actual regulation in relation to liquidity management. This is the link to the 2006 legislation that came into force in 2007, as seen in paragraph 9.4 Implementation (page 27 of pdf):
  http://www.financialregulator.ie/industr...20Risk.pdf
  
  Having failed completely at enforcing his own regulations, the Regulator then re-issued the above regulation in June 2009. Although the preamble refers to Banking Acts dating as far back as 1942, there is no reference to the fact that these liquidity requirements came into force in 2007. Here is the link to the 'new' regulation. The person who can find paragraph 9.4 in this document might also be able to find Ireland's missing billions (observe pages 28-29 of the pdf file):
  http://www.financialregulator.ie/industr...0Final.pdf
  Parag. 10 which stipulates possible imprisonment penalties for breach of liquidity regulations remains unchanged. Ireland is now on the verge of financial meltdown due the most severe liquidity crisis it has ever faced, yet not a single executive is in prison.
  The only specific response by official Dublin to Norris' allegations appeared in Ireland's Business Post:
  http://www.thepost.ie/story/eysncwauoj/
  The Regulator told the Post that his records differ; quelle surprise?
  PS to follow...
  
  

• WhistleblowerIRL
  
  17 November 2010 9:39AM
  
  PS to my comment above:
  1. In his reply to Senator Norris, Minister Lenihan referred to Ireland's reliance on ECB funding through-out the liquidity crisis, in return for which Ireland was offering full cooperation with Eurozone countries. However, although Minister Lenihan was provided by Senator Norris with the name of the offending bank, Minister Lenihan did not give any indication that the authorities in the central-European country in which the parent bank is domiciled were informed of this calamitous breach. Surely, had Minister Lenihan, or the Irish Regulator, informed their continental counterpart of this incident, they would have been eager to state that on record?
  Sachsen Landesbank and Hypo Real-Estate (Depfa) Bank both neared collapse on account of their mismanaged and poorly regulated Irish operations. LBBW Bank and the German taxpayer, respectively, will be paying for these fiascos for years to come. Would it not have been proper order for Minister Lenihan to ensure that the failings of this yet-to-be-named Dublin-domiciled bank, which is part of one of the largest banking groups in central Europe, to have been brought to the attention of its regulating authorities? Perhaps that would just have been too embarrassing; it was bad enough that an ex-governor of the Central Bank of Ireland sat on Depfa's board of directors when it was allegedly about to go under:
  http://www.irishtimes.com/newspaper/fina...27333.html
  <b>Derek Scally, The Irish Times correspondent to Berlin, wrote last August:
  "...as long as things weren’t broken, no one saw a need for a fix. An unholy trinity of events changed that, beginning in September 2007.
  After years of record returns, Saxony’s Sachsen LB state bank realised its Dublin-based subsidiaries had been gambling off the balance sheet and needed €17 billion overnight to save the entire group from collapse. A second pile of debts worth €600 million were subsequently uncovered
  .
  A whip-around from Germany’s banks saved the day, and a fellow state bank eventually bought the Saxon operation. But the near-disaster meant years of gossip about the IFSC [Irish Financial Services Centre, WhistleblowerIRL] in Germany turned into open speculation about the veracity of Dublin’s reputation as a serious financial marketplace.
  Then in June 2008 the Irish rejected the Lisbon Treaty, a document the average German had never read or heard of. No matter: the No was perceived here as a slap in the face from Irish ingrates to generous Germans, a view which, when fixed, was impossible to shift.
  Four months after Lisbon, Ireland was back in the German headlines after the IFSC-based Depfa bank, a subsidiary of Munich’s Hypo Real Estate (HRE) property lender, ran out of funding and required a package of emergency loans and guarantees that would eventually top €100 billion. Amid a huge political scandal in Germany, HRE was finally nationalised."
  </b>
  http://www.irishtimes.com/newspaper/fina...13254.html
  2. The Irish government has made sure that all of the so-called bank investigations, Regling & Honohan in the past, Nyberg in the present, will not go near the foreign banks operating in Dublin. These have been kept outside the remit of their mandates.
  Regling & Honohan did as they were told by Minister Lenihan and did not mention names of specific executives who drove the Irish banks into the ground. So you see, its no one's fault really.
  3. Minister Lenihan announced on RTE (the national tv station) that bankers were not being sent to prison because the Irish law does not provide for it. He rightfully counted on the fact that no one would remind him of paragraph 10 of the Liquidity Regulations (see my comment above). Where is the esteemed Law Society of Ireland? Why have the Law departments of Ireland's universities kept silent about this? could it be because they are all paid by the state?
  4. The only people who are paying the price for the crimes committed by bankers and the Regulator, with the blessing of the government, are my fellow Irish citizens - the young who are forced to leave the country by the thousands, the families who can not afford the next mortgage payment, and the elderly and infirm who await their misfortune with horror.
  
  5. A prominent member of one of the opposition parties recently said to me - "we can't afford the consequences of revealing this story, we already have enough to deal with if we come to power".
  
  Prime Minister Cowen was Minister of Finance when I resigned in 2007.
  Generations to come will judge our politicians harshly for allowing our country to be destroyed.
  
  

http://www.guardian.co.uk/business/2010/...ebt-crisis