AIB chief executive Mr Michael Buckley has said he had no knowledge of an internal memo prepared two years ago that identified and estimated the cost of the bank's overcharging on certain foreign exchange transactions.
Responding to a report published yesterday by the Irish Financial Services Regulatory Authority (IFSRA), Mr Buckley accepted that certain staff and management at AIB knew about the foreign exchange problem but said that they had never reported it "up the line". He said the memo on the subject was never circulated to his senior management team.
In its report, IFSRA said at least seven opportunities arose for certain staff and management within the bank to identify and disclose the discrepancy to the relevant regulator but this was not done.
IFSRA's chief executive, Dr Liam O'Reilly, said the bank "deliberately hid" these facts from the regulator for almost eight years.
IFSRA also confirmed that between January and April 2004 some individuals at AIB had moved to correct the rate of commission charged on the foreign exchange transactions. Dr O'Reilly said this left the bank "open to the interpretation" that it was preparing to apply to raise the commission rate and would never have disclosed the problem to IFSRA or its customers.
"The failures within AIB uncovered by the investigations are completely unacceptable. We will not tolerate such practices within the financial services industry," he said.
Mr Buckley said the bank did not dispute the report's findings and was working to "put things right".
Up to 10 of its senior management are understood to be at the centre of a disciplinary process which is continuing. A number of the individuals who have been notified of a pending disciplinary hearing have taken legal advice. They are also entitled to appeal any findings which could include sanctions and dismissal.
In a second report, IFSRA criticised the bank for failing to discipline individuals who were involved in "inappropriate favourable deal allocations" between 1989 and 1996 that benefited an offshore vehicle used by some of AIB's most senior executives and a small number of clients.