Central Bank board concerns pushed aside by ‘weight of advice’

A former non-executive director of the Central Bank and the financial regulatory authority has said they pushed concerns about the economy aside because of the "weight of the professional voices" that "buffers" were in place.

John Dunne, who also served as director general of employers' group Ibec until 2000, said their concerns were mitigated by internal and external views from the ESRI, IMF and OECD.

He told the banking inquiry their “very real concerns” were discussed by the board of the Central Bank. He acknowledged that “lights should have been flashing”, but he said the “weight of the professional voices” ameliorated and mitigated their concerns.

Asked by Socialist Party TD Joe Higgins if there was a “predilection for light touch regulation”, Mr Dunne insisted that was not a factor. He said he did not like that term as it implied that people weren’t doing their jobs.

He insisted it was “principles-based regulation”, the rules of which were quite clear.

Mr Dunne said that during his term with Ibec the issue of a new type of regulatory process was not an issue. But when the regulator was separated out from the Central Bank he said that was a mistake and it had very negative consequences, especially for the regulator.

Mr Dunne, as a member of the financial services regulatory authority, said when economic and regulatory staff were all in the same organisation “one fed into the other pretty seamlessly”.

In the new separated situation, the pressure on the regulator as distinct from the analytic side was growing and a number of staff in analysis “were being poached”.

He said, however, they felt they did not get the information from the regulator that they should have received.

Mr Dunne told the inquiry: “I fully accept my own personal share of responsibility and accountability for the events which occurred during my time in office as a non-executive director.”

He said that while he contributed “to the best of my ability to the regulatory authority and the board of the Central Bank, in hindsight key issues were missed and I shall ever be mindful of the consequences of this.

“The damage caused to the social fabric of the nation and to individuals has been immense and is a matter or enormous personal regret.”