The representative body for small and medium firms has called for the entire board of the Financial Services Regulatory Authority to be removed for its “gross incompetence”.
In a statement Isme said the collapse in confidence and trust in the Irish banking system by the international community – evidenced by the higher rate the State now must pay when it borrows money – must be laid at the feet of the regulator and that a new, independent board was required to restore confidence.
Isme chief executive Mark Fielding said instead of investigating and monitoring the lending practices of Irish banks "we ended up with an axis of incompetence, consisting of the Department of Finance, the banks and the Regulator."
"Surely the role of the regulatory authority is to be the watchdog and, some would say, bloodhound of the financial services sector. . " he said.
The Regulator had placed too much trust in the Irish banks and did not treat their procedures or their results with "even a modicum of suspicion", Mr Fielding added.
"It is not good enough to just have the regulator face a few awkward questions in an Oireachtas committee room and witter away about prudential oversight while totally improper conduct was tacitly condoned by the authority within certain banks".