I wondered in my last post about the criminal convictions for Pat Whelan and William McAteer "if we will finally see someone behind bars for the criminal activities of this rogue bank".
The answer, at least for now, is no.
The judge has decided that it would be “incredibly unjust” for the two men to spend time in prison.
I see no mention of hefty fines either.
All I can see is that the judge will decide at the end of this month on whether or not community service would be appropriate.
So I don't really know what to say. Sean Fitzpatrick was found not guilty, these two men are guilty but not going to jail, David Drumm continues to hide out in the United States.
Justice is not being served.
Showing posts with label Banks. Show all posts
Showing posts with label Banks. Show all posts
Saturday, 12 July 2014
Sunday, 20 April 2014
Anglo Irish Bank: Sean FitzPatrick
I mentioned in my last post that Sean FitzPatrick was found not guilty in his first criminal trial.
I wonder if this means that he is innocent of any wrongdoing?
Let's examine some of the evidence.
Fitzpatrick was the CEO of the bank from 1986 until 2005, when he became its chairman. He was chairman until he resigned in December 2008 as details emerged of secret loans (more than €100 million!) he had taken out with the bank.
So he presided over this bank during a period of unprecedented growth. The following chart shows the growth in share price over some of this period:
It is clear in hindsight (and was pretty clear at the time if I'm being honest) that much of this growth was due to imprudent lending practices.
Professor Patrick Honohan (an economist who was appointed Governor of the Central Bank of Ireland in September 2009) had the following to say in 2009:
He was the chairman of the bank at the time (2008) when the following took place:
It has been my experience that companies have an ethos and a culture, and that these come from the leadership. We have learned quite a bit about the culture of Anglo, especially from the infamous tapes.
If FitzPatrick did not know about any of these illegal activities, then he created the environment in which they could take place. He set the tone and the agenda. He hired the people.
It seems incredible to me that when (if?!) FitzPatrick examines his own conscience, he is unable to find anything which causes him remorse and disquiet for his future.
I wonder if this means that he is innocent of any wrongdoing?
Let's examine some of the evidence.
Fitzpatrick was the CEO of the bank from 1986 until 2005, when he became its chairman. He was chairman until he resigned in December 2008 as details emerged of secret loans (more than €100 million!) he had taken out with the bank.
So he presided over this bank during a period of unprecedented growth. The following chart shows the growth in share price over some of this period:
It is clear in hindsight (and was pretty clear at the time if I'm being honest) that much of this growth was due to imprudent lending practices.
Professor Patrick Honohan (an economist who was appointed Governor of the Central Bank of Ireland in September 2009) had the following to say in 2009:
"A very simple warning sign used by most regulators to identify a bank exposed to increased risk is rapid balance sheet growth. An annual real growth rate of 20% is often taken as the trigger. Each of the locally-controlled banks had at least one year in which this threshold was triggered. One of them, Anglo Irish Bank, crossed it in eight of nine years, and indeed its average annual rate of growth 1998-2007 was 36 per cent. Another, Irish Nationwide, crossed the line six out of the nine years, for an average rate of growth over the nine years of just above 20%. So this was a very obvious and public danger sign not only for these two banks, but because of the potentially destabilising effect of reckless competition on the entire sector. The rapid growth in the market share of Anglo Irish (from 3 to 18% of the total assets of the six locally-controlled institutions that subsequently received the Government guarantee) was certainly an important influence inducing the other banks to relax lending terms to avoid losing even more market share."Professor Honohan's last sentence here is very mildly phrased: I prefer to think of Anglo as a cancer which which was affecting the Irish banking sector and the wider economy.
He was the chairman of the bank at the time (2008) when the following took place:
- The crimes of which Whelan and McAteer have just been convicted (July)
- The 6-7 billion Euro "B&B transfers" between Irish Life & Permanent and Anglo (September) which have not yet come to trial
It has been my experience that companies have an ethos and a culture, and that these come from the leadership. We have learned quite a bit about the culture of Anglo, especially from the infamous tapes.
If FitzPatrick did not know about any of these illegal activities, then he created the environment in which they could take place. He set the tone and the agenda. He hired the people.
It seems incredible to me that when (if?!) FitzPatrick examines his own conscience, he is unable to find anything which causes him remorse and disquiet for his future.
Anglo Irish Bank Criminal Convictions
I'm not a legal export. I'm not a banker. I never set foot in Anglo Irish Bank. I don't know any of the people who worked there. I never bought any shares, thank God (I've always been a believer in the theory that if something looks too good to be true, it probably is to good to be true).
I'm just a normal Irish citizen who follows the news and who has seen the disastrous impact that the activities (some of which have now been confirmed as being illegal) have had on the Irish State.
So the current trial of 3 gentlemen from Anglo was of interest to me. Thus far nobody from Anglo has gone to jail.
On Thursday last, Sean FitzPatrick was found not guilty of the charges which were brought against him. Afterwards he thanked his family, his legal team (for obvious reasons!) and the jury.
He had the temerity to mention "the past six years of great personal difficultly"! I find that unbelievable! The bank that he ran for so long, and of which he was the Chairman at the time of these particular illegal activities, brought this country to his knees through its own actions, and the impact its actions had on other elements of the banking sector. He played an important role in wrecking the lives of so many people who lost jobs or found themselves to be living in negative equity. And he complained of his "great personal difficultly"!
How some people can be so self-centred, and have so little remorse, will always be a complete mystery to me.
I am hopeful, of course, that other criminal proceedings will have a different outcome for Mr FitzPatrick.
The other 2 gentlemen who were facing charges were not so fortunate: Pat Whelan and William McAteer were found guilty of giving illegal loans to the "Maple 10" to buy shares in the bank. They will be sentenced on April 28th.The charges, under section 60 of the Companies Act, carry a penalty of up to five years in prison and/or a fine of up to €30,000 per offence.
I look forward to that date with interest to see if we will finally see someone behind bars for the criminal activities of this rogue bank.
The three gentlemen are pictured here:
I'm just a normal Irish citizen who follows the news and who has seen the disastrous impact that the activities (some of which have now been confirmed as being illegal) have had on the Irish State.
So the current trial of 3 gentlemen from Anglo was of interest to me. Thus far nobody from Anglo has gone to jail.
On Thursday last, Sean FitzPatrick was found not guilty of the charges which were brought against him. Afterwards he thanked his family, his legal team (for obvious reasons!) and the jury.
He had the temerity to mention "the past six years of great personal difficultly"! I find that unbelievable! The bank that he ran for so long, and of which he was the Chairman at the time of these particular illegal activities, brought this country to his knees through its own actions, and the impact its actions had on other elements of the banking sector. He played an important role in wrecking the lives of so many people who lost jobs or found themselves to be living in negative equity. And he complained of his "great personal difficultly"!
How some people can be so self-centred, and have so little remorse, will always be a complete mystery to me.
I am hopeful, of course, that other criminal proceedings will have a different outcome for Mr FitzPatrick.
The other 2 gentlemen who were facing charges were not so fortunate: Pat Whelan and William McAteer were found guilty of giving illegal loans to the "Maple 10" to buy shares in the bank. They will be sentenced on April 28th.The charges, under section 60 of the Companies Act, carry a penalty of up to five years in prison and/or a fine of up to €30,000 per offence.
I look forward to that date with interest to see if we will finally see someone behind bars for the criminal activities of this rogue bank.
The three gentlemen are pictured here:
Tuesday, 24 September 2013
Central Bank Regulation?
I mentioned surprising radio adverts in my last post.
At the end of the KBC Bank advert (and all bank adverts) you can still hear those immortal works: "KBC Bank is regulated by the Central Bank of Ireland".
I blogged about this over a year ago but shame has still not forced the CBI to withdraw the requirement for this phrase to be included in radio advertising.
Maybe that's pretty much all that they do and they need to keep doing something.
Today, by coincidence, the CBI announced that it has completed a review of the Anglo Irish tapes and that it "was not obliged, nor did it intend, to make any further statutory reports to An Garda Síochána or the Office of the Director of Corporate Enforcement."
This news item implies that the tapes were reviewed by the CPI after they were released by the Irish Independent. You would imagine that they would aleady have listened to them. Or maybe not.
Perhaps the staff in the CBI found it hard to listen to the deregatory way they were referred to in the tapes. They were referred to as "buddies on Dame Street" and generally painted as being less than competent. Some would argue that there might be some truth in in both of these things.
At the end of the KBC Bank advert (and all bank adverts) you can still hear those immortal works: "KBC Bank is regulated by the Central Bank of Ireland".
I blogged about this over a year ago but shame has still not forced the CBI to withdraw the requirement for this phrase to be included in radio advertising.
Maybe that's pretty much all that they do and they need to keep doing something.
Today, by coincidence, the CBI announced that it has completed a review of the Anglo Irish tapes and that it "was not obliged, nor did it intend, to make any further statutory reports to An Garda Síochána or the Office of the Director of Corporate Enforcement."
This news item implies that the tapes were reviewed by the CPI after they were released by the Irish Independent. You would imagine that they would aleady have listened to them. Or maybe not.
Perhaps the staff in the CBI found it hard to listen to the deregatory way they were referred to in the tapes. They were referred to as "buddies on Dame Street" and generally painted as being less than competent. Some would argue that there might be some truth in in both of these things.
Monday, 24 September 2012
Working for the Bank
Two of my sisters work for banks. I have a sister-in-law and a brother-in-law who work for a bank.
I once applied for a job in a bank. I got an interview which seemed to go well. Then the bank, which had been planning to hire lots of new people apparently, changed its mind and ended up hiring very few. I did not get the job.
The irony is that I am now working for the banks. We all are. I am working to ensure that the banks do not go under. I am working to ensure that bankers do not lose their jobs. I am not working directly for the banks to be sure, but I am earning money so that I can pay increased taxes that can be used to cover the losses which the banks made.
I don't think that is very fair.
The second irony is that we now say casually in conversation that we own the banks. That may be technically a fact, but there is very little evidence of it. We can't force them to loan money to companies and individuals who need money. We can't even force them not to pay themselves bonuses.
The harsh reality is that the banks own us.
I once applied for a job in a bank. I got an interview which seemed to go well. Then the bank, which had been planning to hire lots of new people apparently, changed its mind and ended up hiring very few. I did not get the job.
The irony is that I am now working for the banks. We all are. I am working to ensure that the banks do not go under. I am working to ensure that bankers do not lose their jobs. I am not working directly for the banks to be sure, but I am earning money so that I can pay increased taxes that can be used to cover the losses which the banks made.
I don't think that is very fair.
The second irony is that we now say casually in conversation that we own the banks. That may be technically a fact, but there is very little evidence of it. We can't force them to loan money to companies and individuals who need money. We can't even force them not to pay themselves bonuses.
The harsh reality is that the banks own us.
Sunday, 12 August 2012
Banking and Crime
I want to correct something I said in my last posting.
I said: "The failures of the banks were not directly against individual citizens, but against the whole country".
I want to correct that.
The banks DID fail individuals who owned shares: ordinary people who bought shares in AIB, BoI, and Anglo.
And they DID fail individual customers. They did so by giving them mortgages in cases where (a) the property was ridiculously overvalued and (b) they gave them a loan which was too big when compared with their salaries (and therefore ability to repay).
There was a time when a bank would only give a couple a mortgage amount of 2.5 times their combined salary, and they would be expected to pay at least 10% of the cost of the house themselves. These rules were dropped by the banks with reckless abandon.
I choose to think of this as a crime against those people. Not a crime in the sense of something punishable by law unfortunately. But a crime in the sense which the dictionary defines as "a grave offence especially against morality".
I subscribe to the belief that people in this situation should be able to hand the keys back to the bank and walk away from the loan. They should be able to say: "We both gambled, we both lost". But no, this does not happen, of course. Not for ordinary people. Not in Ireland. They are expected to repay the loan. Even when the house is no longer worth the loan amount. Even when the economy has collapsed and one or both of the people may have lost their jobs. Even when the banks made a major contribution to that collapse.
I said: "The failures of the banks were not directly against individual citizens, but against the whole country".
I want to correct that.
The banks DID fail individuals who owned shares: ordinary people who bought shares in AIB, BoI, and Anglo.
And they DID fail individual customers. They did so by giving them mortgages in cases where (a) the property was ridiculously overvalued and (b) they gave them a loan which was too big when compared with their salaries (and therefore ability to repay).
There was a time when a bank would only give a couple a mortgage amount of 2.5 times their combined salary, and they would be expected to pay at least 10% of the cost of the house themselves. These rules were dropped by the banks with reckless abandon.
I choose to think of this as a crime against those people. Not a crime in the sense of something punishable by law unfortunately. But a crime in the sense which the dictionary defines as "a grave offence especially against morality".
I subscribe to the belief that people in this situation should be able to hand the keys back to the bank and walk away from the loan. They should be able to say: "We both gambled, we both lost". But no, this does not happen, of course. Not for ordinary people. Not in Ireland. They are expected to repay the loan. Even when the house is no longer worth the loan amount. Even when the economy has collapsed and one or both of the people may have lost their jobs. Even when the banks made a major contribution to that collapse.
Saturday, 21 July 2012
Liars and Bankers
Apparently the Bank of Ireland is sending customer who have a "Laser card" a replacement card which is a "Visa Debit card".
I was wondering why they are doing this. Luckily they have a leaflet which includes some "Frequently Asked Questions". Here is the one that tackled my question:
So the Bank is asking us to believe that the reason they are going to the trouble and expense of replacing existing cards is for the good of their customers.
Pull the other one!
It is bad enough that the Bank is one of the banks (albeit not the worst of them) that has brought this country to its knees. But now they have decided to lie to their customers. And we own the Bank!
Now I don't claim to know why the Bank is doing this. But I certainly don't believe that the only (or even the main) reason is because it is better for customers.
I was wondering why they are doing this. Luckily they have a leaflet which includes some "Frequently Asked Questions". Here is the one that tackled my question:
Q: What has the Bank if Ireland moved to a Visa Debit card?
A: Visa is an international brand that offers more convenience, greater access to your money, and more protection for the goods you buy.
So the Bank is asking us to believe that the reason they are going to the trouble and expense of replacing existing cards is for the good of their customers.
Pull the other one!
It is bad enough that the Bank is one of the banks (albeit not the worst of them) that has brought this country to its knees. But now they have decided to lie to their customers. And we own the Bank!
Now I don't claim to know why the Bank is doing this. But I certainly don't believe that the only (or even the main) reason is because it is better for customers.
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