Roche Welcomes Plans to Control Bank Directors

Proposals to introduce new arrangements to control the activities of Bank Directors have been welcomed by Dick Roche TD, Minister for European Affairs.

Welcoming the announcement by the Financial Regulator Minister Roche said “decent people were shocked at the revelations about loans given within the banking system to Directors and senior banking personnel.”

Against the background of the revelations of what has been happening in the Irish banking sector, the announcement by the Financial Regulator that new rules to regulate loans given by banks to their own directors are to be introduced is very welcome news.

“The Financial Regulator, Mr. Matthew Elderfield is absolutely correct when he says such loans have ‘the potential to give rise to conflicts of interest and abuse.’

He is also right when he points out that loans to bank directors and senior management have been subject to abuse and excess, if not outright subterfuge as in one notorious case, where the matter was designed to avoid detection.

The arrangements proposed by the Regulator will impose a statutory code of practice concerning lending by banks and building societies to related parties. The new code is also intended to ensure such lending within financial institutions will in future be on an ‘arms length’ basis.”

Minister Roche concluded, “The recent revelations about what has been happening in a number of financial institutions in Ireland demonstrate that the sector must be more tightly regulated in future. The announcement by the Financial Regulator is welcome and should have across the board support.”