Irish Banking Federation Chief Executive Pat Farrell has ‘unreservedly apologised’ for bank customers, shareholders and the wider community being let down by the banking sector.
Speaking to the Oireachtas Economic Regulatory Affairs Committee, he said he fully understands the depth of pubic anger at the banking system for letting them down and failing to manage risk effectively.
He also acknowledged that it will take a long time to restore trust.
Fianna Fáil Deputy Sean Ardagh asked what has changed with a significant number of bankers still in the system, given that it was questionable whether they had previously had the 'strength of character' and the 'moral compass' to do the right thing.
Mr Farrell said there have been changes in the banks, but that they must maintain a core of expertise, and that if that is eliminated it will not serve the best interests of the wider economy and the Government's and taxpayers investment in these institutions.
On bank regulation, Mr Farell said consumer protection is important but the old regime had the balance wrong between the consumer and prudential mandates.
He said the consumer mandate was prioritised over prudent concerns, but that strong prudent supervision is the ultimate guarantor of consumer rights.
Mr Farrell said the focus needs to be on prudent supervision in the future while not 'de-emphasising' consumer protection.
A rules based regime is not the solution people might think, he said, such approaches failed in the UK and USA.
He said focusing on rules versus principles is a false argument.
Deputy Kieran O’Donell said the banks have no place in dictating the system of regulation for the future.
Mr O'Donnell said a rules based system would have prevented 100% mortgages and the escalation in the residential property market.
