Breaches of anti-money laundering and terrorist financing compliance rules by AIB, resulting in a Central Bank fine of €2.275m, represent a serious failure of governance at the bank, according to the Fianna Fáil Finance Spokesperson Michael McGrath.
Deputy McGrath was commenting following the publication of a Settlement Agreement between the Central Bank and AIB.
Deputy McGrath commented, “Coming just weeks before the planned IPO of the bank, this is an embarrassing development for the bank and indeed the Government. The identification of serious breaches by the regulator of vital Central Bank regulations sends the wrong message to potential investors in the bank at this crucial time.
“Before taking further steps towards an IPO, the Minister for Finance needs to seek an assurance from the Board of AIB that it has fully got its house in order in terms of compliance with Central Bank rules. We also need to know whether any further Central Bank investigations into AIB are underway that could impact on the decision to proceed with an IPO.
“The Central Bank is to be commended for taking a hard line on breaches of anti-money laundering and terrorist financing regulations and took a similar approach in imposing a fine of €3.3m on Ulster Bank last October. Ultimately, the cost of these fines is passed on to customers and the real damage to the banks is a reputational one. As well as levying fines on the financial institutions, the Central Bank needs to assess whether individuals failed in their respective duties.
“Failure to report suspicious transactions to the Gardaí and the Revenue Commissioners is an extremely serious matter. It is deeply concerning that AIB did not allocate sufficient resources to investigate a significant backlog of potentially suspicious activity. AIB and all the other banks need to dedicate sufficient resources to ensure these regulations are fully complied with,” concluded McGrath.