The role of the Central Bank in detecting wrongdoing by Guinness and Mahon bank comes in for stinging criticism in the Ansbacher report.
The report says the Central Bank failed to "test, appraise and gather the information available to it" and that this "resulted in the true nature of Ansbacher's activities going undetected for longer than ought to have been the case".
It describes as "unwise" the decision of the Central Bank not to further pursue reservations it had about the activities of Guinness and Mahon in the late 70s and 80s.
The report says that while the Central Bank deserved credit for detecting the unusual nature of the services offered by the bank, it failed to gather further information available to it.
As early as 1976, the Central Bank suspected Guinness and Mahon was abusing its power. That year, it carried out a full inspection on the bank. Lead examiner on that inspection, Mr Adrian Byrne, said that what the examiners encountered on the inspection "just didn’t smell right... it didn’t taste right."
When further concerns were raised about back-to-back loan arrangements after a 1978 inspection of Guinness and Mahon, Mr Des Traynor made representations to the Central Bank assuring them the volume of these type of arrangements would decrease.
The report says: "It was unwise of and regrettable for the Bank to have accepted Mr Traynor’s representations, particularly in circumstances where the Bank already harboured reservations about his protestations of innocence regarding the back-to-back deposits."
A spokesman for the Central Bank today said there were lessons to be learned from what had happened with Guinness and Mahon. Mr Neil Whoriskey said that while a certain amount of criticism of the bank’s actions were to be expected, the system of regulation had changed significantly since then.
"The Bank is studying it [the report] in detail to assess what follow-up action may be required. We will also continue to provide any assistance possible to other State agencies on these issues," he said.