A young banker decided to buy his first tailor-made suit. He went to the finest tailor in town and got measured, writes Siobhán Creaton, Finance Correspondent

A week later he went in for his first fitting. He put on the suit and he looked stunning - he felt he could do business in this suit. As he was preening himself in front of the mirror he reached down to put his hands in the pockets and, to his surprise, he noticed that there were no pockets. He mentioned this to the tailor who asked him: "Didn't you tell me you were a banker?" The young man answered: "Yes, I did." The tailor replied: "Who ever heard of a banker with his hands in his own pockets?"

This old joke seems particularly apt in the current climate.

Today, National Irish Bank (NIB) will be in the eye of the storm as a litany of sins, ranging from overcharging customers to assisting them to evade taxes, will be laid bare in a damning report.

Last week, AIB, the Republic's biggest financial institution, issued the first of three reports detailing how it overcharged customers in a range of areas by more than €34 million.

The Revenue Commissioners is investigating offshore investments used by two of AIB's former chief executives and other senior management - prompting many observers to conclude that its culture is rotten to the core.

This week, AIB chief executive Mr Michael Buckley insisted once more that the bank's culture was not corrupt and that these damning disclosures had not resulted in any loss of customers.

Indeed, he was delighted to be in a position to deliver some good news for AIB investors, namely a 10 per cent increase in profits to €699 million in the first half of this year. Of course, Mr Buckley would be quick to tell you that it would be wrong to conclude its predilection for overcharging customers was responsible for swelling its profits.

For now, AIB insists that none of its customers have closed their accounts but it must realise its brand has been damaged.

NIB's suffering has been greater. In 1998, the discovery of sharp practices - such as charging customers over the odds on their loans and overdrafts and applying unauthorised fees - was devastating.

The Australian-owned institution had begun to make inroads in the Irish market through brash marketing campaigns and special offers to entice people to transfer their business to NIB. Those who later discovered that the bank had been dipping further into their pockets than it should have were appalled.

Some closed their accounts but the damage done to the bank's brand is reflected in the fact that, six years on, NIB claims just a 3 per cent share of the Republic's banking market

These massive breaches of trust have badly dented consumer confidence in Irish financial institutions and have horrified many bank officials who bear the brunt of customer disquiet and suspicion as they conduct their business at their local branch.

Customers will have been less than heartened to find out that officials at AIB had already moved to correct the rate of commission being charged to certain customers on foreign exchange transactions in the weeks before the financial regulator started to investigate the overcharging.

The currency converter machines used by bank staff to calculate these transactions had been almost totally adjusted to reduce the rate of commission charged from one percentage point to 0.5 of a percentage point, in the days before the Irish Financial Services Regulatory Authority contacted the bank.

The bank confirmed that staff working on the foreign exchange counters were not informed why the machines were being altered. Had the error not been made public, it is likely that these customers would never have known they had been overcharged.

The Irish Bank Officials Association (IBOA) says that many of its members are demoralised and have been disgusted to learn of much of what went on. The revelations about wrongdoing at AIB and NIB have been brought to public attention by so-called "whistleblowers" - staff who have decided to report such misdeeds. In both banks, they felt unable to raise these matters within their organisations and sought to highlight them through the media or the regulator.

IBOA general secretary Mr Larry Broderick has told the Dáil Committee on Finance and the Public Service that bank employees are working in a "culture of fear" and are frightened of speaking out on virtually any issue for fear it will damage their career prospects.

Mr Broderick told the committee members that the "rot" set in across Irish financial institutions in the late 1980s and early 1990s and blamed the switch to more performance-related pay for fostering a culture of greed at the expense of good practice.

In the 1980s, a job in the bank was a prized possession. It offered security and a relatively good salary at a time when the Irish economy was in the depths of depression. The banks and building societies were spoiled for choice when it came to recruiting staff, attracting thousands of applications annually.

Twenty years on, such jobs have fundamentally changed. Staff no longer enjoy the same degree of security. New entrants join the ranks at much lower salaries than in the past and must boost their take-home pay by earning commission by achieving demanding sales targets.

There are some visible signs of the level of discontentment among bank staff. It is estimated that 1,000 staff voluntarily leave bank jobs every year. Some have taken severance packages introduced at most financial institutions as part of a drive to reduce costs while younger employees are increasingly looking to other careers.

At the end of another bad week for bankers, it is clear the industry is facing a mammoth task to restore the confidence of customers and staff. They can only hope that the many investigations into these transgressions will lead to meaningful reforms and a better deal for everyone.