The former governor of the Central Bank, Patrick Honohan, has said the organisation was probably too trusting of the banks when it was dealing with the tracker mortgage scandal.
Mr Honohan was commenting on the long-running saga, which saw tens of thousands of homeowners wrongly moved to higher interest loans by the banks.
These mortgage holders had generally fixed their home loans, but when the fixed period expired, they were not allowed to return to their original low-interest tracker rates and instead faced higher repayments.
It is estimated that more than 42,000 mortgage accounts were affected.
When the scandal was exposed, the banks had to pay more than €1 billion to rectify the issue.
The former governor said: "What surprised me was that the banks had been shook to their core by the (financial) collapse…every single bank in Ireland failed.
"I assumed - wrongly as it proved - that the people in charge of the banks would realise actually this is a different world we're in now…we are now in the situation of recovery, recovery for ourselves and recovery for our customers."
He added: "It surprised me that they would play fast and loose, sharp practice, because it worked out very badly for them in the end."
Mr Honohan made the comments to a new two-part RTÉ documentary series, TRACKERS: The People V The Banks.
He said that during his tenure from 2009 to 2015, "the problem of non-performing loans was the biggest priority".
But he said there were "people in the Central Bank who were dealing with the question of these disputed tracker mortgages and were engaging with the banks".
He added: "Nobody was aware of the scale in which the banks were playing fast and loose with the arrangements they had made with customers… That only became gradually apparent."
Mr Honohan said the Central Bank could have acted on the tracker mortgage scandal sooner.
He said: "Some ideas could have been implemented earlier...it's always nice to do things sooner if they’re going to be effective sooner. I don’t dispute that."
However, he did emphasise that there was enforcement action taken by the Central Bank.
Read more:
Effects of tracker mortgage scandal 'far from over'
Explainer: The tracker mortgage scandal
Trackers: The People V The Banks begins tonight at 9.35pm on RTÉ One and RTE Player
