Ex-INBS boss Fingleton argues regulator only made ‘recommendations’ on credit reviews

Michael Fingleton, the former managing director of Irish Nationwide Building Society (INBS), sought to establish at a Central Bank inquiry on Thursday that certain communications from the regulator made "recommendations" rather than statutory orders in the run-up to the financial crisis.

Mr Fingleton, who is representing himself at the inquiry, noted that some letters from the regulator to the now-defunct building society about its handling of credit reviews in 2006 and 2007 contained no legal provision.

He also suggested that letters from the Central Bank in this period were issued under low or medium priority.

The Central Bank's acting head of banking supervision Yvonne Madden, who led a team that supervised INBS in the run-up to the crash, said non-statutory recommendations had been made in one particular letter to the building society.

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However, she told the inquiry these could “potentially” have been escalated to a statutory obligation, in accordance with legislation, had the regulator discovered that the building society was not complying. Instead, it was given assurances that it was.

Ms Madden, a witness to the inquiry, also highlighted that “a number” of the regulator’s letters to INBS in 2007 had been issued with a high-priority status.

Next witnesses

Next week's witnesses are the financial regulator's former prudential director Con Horan and its former chief executive Patrick Neary.

The inquiry is investigating whether Mr Fingleton and three other former managers of the building society were involved in seven regulatory breaches at INBS between August 2004 and September 2008.

The others are former INBS finance director Stan Purcell, former commercial lending manager Tom McMenamin and Gary McCollum, who previously led the society's UK lending activities from Belfast.

This module of the inquiry centres around the so-called fifth suspected prescribed contravention (SPC), which relates to the role of the INBS credit committee.