The end of another week brings another damning indictment of the Irish banking industry.
The High Court inspectors' report into National Irish Bank published yesterday exposes the inner workings of an organisation where the drive to achieve bigger and bigger profits saw it part company with normal ethical standards. The inspectors have followed a trail of what they term improper practices from bank counters across the country to the desk of the chief executive in Dublin, but not - surprisingly some may think - into the boardroom.
The report is sparing of the bank staff and their immediate bosses, the individual bank mangers. Instead, it saves its fire for the middle and senior management who knew about, and failed to address, the issues surrounding non-resident accounts and the sale of Clerical Medical International investments. A total of 19 executives are found to have failed to a greater or lesser extent. The company's internal auditors and its external auditors, KPMG, are also found to carry some responsibility.
Ultimate responsibility is left at the door of Mr Jim Lacey, who was chief executive between 1988 and 1994 and his successor Mr Barry Seymour who left in 1996. Slightly less blame is attributed to Mr Seymour's successor, Mr Philip Halpin, but he does not emerge unscathed. While the inspectors are in no doubt that these men were aware of the problem with bogus accounts, there seems to be some doubt as to whether they knew what lay behind the success of the CMI bond scheme. The inspectors assert that they must still take responsibility regardless of whether they knew the detail of what went on. The inspectors' position in this regard is in contrast to their position on the board of NIB, which is judged to have discharged its responsibilities. This would appear to reflect a narrow, but legally correct, view of what is the role of a board of directors.
This issue aside, the report's assignment of responsibility down to the level of the individual brings an end to this sorry chapter. However it is too much to hope that this report will represent some nadir for the image of the Irish banking industry. The autumn will see the publication of reports into alleged tax evasion by former senior executives at AIB and into who was at fault for the long duration of its foreign exchange overcharging.
This weekend, however, it is NIB's turn to hang its head in shame, although there is little in the report for the rest of the Irish banking sector to take comfort in. The DIRT problem was industry wide and it is safe to assume that a High Court inspection of any of the other banks would produce a litany of failings at middle and senior management level. The focus now will turn to NIB's future, with its parent National Australia Bank expected to put it up for sale now that the six-year investigation has come to an end. The much tarnished brand is likely to disappear and it will be a sad end for an institution that was once seen as a nimble, customer focused alternative to the two dominant players.