REPORT: Michael Buckley said culpability for the $691 million loss stopped with Allfirst's David Cronin

The board of AIB has laid the blame for the fourth-biggest financial scandal in history with six individuals who worked at its small treasury department in Baltimore. No Irish-based executive will lose his or her job as a result of the findings of a report commissioned and paid for by AIB.

The bank has dismissed the six individuals based in Baltimore, including the Allfirst head of treasury, Mr David Cronin.

The bank also announced the retirement of the head of its US business, Mr Frank Bramble, who, it said, had already expressed his desire in January to step down. AIB's group treasurer, Mr Pat Ryan, will proceed with his already planned retirement.

AIB group chief executive Mr Michael Buckley said culpability for the $691 million (€783 million) loss stopped with Mr Cronin.

"The board examined the whole area of accountability and a number of people are leaving the group at higher levels."

When questioned further Mr Buckley added that "no blame" could be attached to Mr Bramble and Mr Ryan, but there was a requirement for accountability.

The board unanimously rejected resignations offered by Mr Buckley and AIB chairman Mr Lochlann Quinn last Tuesday. Allfirst chief executive Ms Susan Keating, to whom Mr Cronin reported, did not offer her resignation and retains her post with the support of the board.

Mr Eugene Sheehy, head of AIB's retail business in the Republic will move to Baltimore to work with Ms Keating at Allfirst and succeed Mr Bramble.

The bank has also stated that former AIB chief executive Mr Tom Mulcahy and former head of Allfirst Mr Jerry Casey will leave the Allfirst board to make way for two non-executive directors with recognised skills in the financial services sector.

The report, issued yesterday, details much of what was already known about the fraud. It found no evidence of collusion between Allfirst foreign currency trader Mr John Rusnak and any other financial institution or individual outside of Allfirst - although Mr Ludwig qualified his findings on the basis of the limited time available for him to carry out his work, and his inability to interview Mr Rusnak and the traders he dealt with.

Mr Buckley admitted the report showed "incompetence and lack of supervision at a gross level".

The Ludwig report states that the losses appear to have arisen out of possible violations of federal and state laws by Mr Rusnak and possibly others.

Such violations are being investigated by the FBI and the regulatory authorities in the US and the Republic. So far, no charges have been brought against any of the individuals named by Mr Ludwig.

The Central Bank of Ireland said it was continuing to work with the US Federal Reserve to investigate the events at Allfirst. In a statement it said the bank is "seriously concerned" about what has emerged and said it would continue to discuss the implementation of the report's recommendations with AIB.

The outcome of the Federal Reserve's inquiries could further damage AIB and Allfirst, and could result in the payment of massive fines to the US government. A number of class actions have also been filed in the US, with investors seeking unspecified compensation, claiming individuals in Allfirst were aware of Mr Rusnak's large trading as far back as 1999.

These investors will also be closely examining the Ludwig report, which shows that there were clear signs of a problem at the US treasury divisions for a number of years that the bank failed to notice or act on.

When the fraud was announced on February 6th, Mr Buckley said he had first learned of the losses incurred by Mr Rusnak two days earlier.

The report details how Mr Buckley contacted Mr Cronin in May 2001 to inquire about the size of Allfirst's trading in the foreign currency markets, having heard a rumour from within AIB that prompted concern.

Mr Buckley was reassured by Mr Cronin that there was nothing unusual going on and he accepted his assurances. The report shows that Mr Bramble and Ms Keating had expressed reservations about Mr Cronin's performance as head of treasury.

Mr Buckley stressed their difficulties with Mr Cronin related to issues of "management style" rather than his competence.

The report also identifies earlier warning signs, including an inquiry to Mr Ryan by Citibank in March 2000 about a large settlement due to occur at the beginning of April.

Mr Ludwig said he was unable to complete all of the interviews and reviews of electronic and documentary records within the 30 days available to him for his inquiry and that more information was likely to be uncovered as a result of further investigation.