The Financial Services Regulatory Authority has said there was a serious breach in its office in overlooking the directors' loans at Anglo Irish Bank. It also said the controversy had hit public confidence in its work.
The Financial Regulator has clarified the statement made at the Oireachtas Committee today that it first picked up the Anglo Irish Banks loans to directors issue at the end of September 2007.
A spokesman for the regulator said it recieved a report on Anglo Irish Banks loans in November 2007 and followed it up during December 2007 and January 2008.
That report covered the period until the end of September 2007.
Four Anglo Irish bank directors and the head regulator Patrick Neary have already lost their jobs over the revelation of the concealment of €87m in loans to the bank's former chief executive and chairman Sean FitzPatrick.
Today the Financial Regulator came in for heavy criticism as it defended its role in overlooking the movement of the loans back and forth to Irish Nationwide over eight years.
Dermot Quigley, who headed up the regulator's own investigation into the controversy, said the loans had been discovered on Irish Nationwide's books as far back as September 2007 - but no further action was taken because the regulators were diverted by the banking crisis.
He said this was not an excuse but the issue had to be viewed in context. Facing calls for their resignation, the remaining directors said they felt they should stay on as there was more work to be done.
Mr Quigley also revealed that the loans to Sean FitzPatrick had sometimes gone above €87m.
Independent Senator Shane Ross said the Anglo directors' loans controversy was a serious shambles and a cataclysmic event for the Irish financial system.
The chairman of the Financial Services Regulatory Authority, Jim Farrell, told the committee that some of the behaviour of banks' top executives has been totally unacceptable.
Mr Farrell also said the regulator accepted that substantial change was required to the office.
Former Financial Regulator Patrick Neary was present at today's committee hearing but spoke only briefly, on one occasion, to answer a question about the role of Anglo's auditors Ernst & Young in the directors' loans controversy. He said a lay person would expect that an issue of that magnitude would be picked up.
