The Chairman of the Irish Nationwide Building Society, Michael Walsh, resigned earlier this evening. The decision was unexpected.

The building society has been at the centre of questionable loan arrangements involving the former Chairman of the now nationalised Anglo Irish Bank

Earlier this week, Moody's downgraded Irish Nationwide's debt ratings, warning it would have to change its business model by cutting its large exposure to commercial property.

Michael Walsh is also a director of number of other companies. He is an executive director of International Investment and Underwriting (IIU), a private equity firm owned by his close associate Dermot Desmond. IIU is based in Dublin's IFSC.

In the Irish Nationwide report for last year, Dr Walsh is recorded as receiving remuneration of €100,430 as a non-executive director, compared to €91,300 in 2006.

Both the Government and the Financial Regulator have been made aware of Mr Walsh's resignation.

A statement from the Department of Finance tonight said the Finance Minister has been informed of Dr Walsh's resignation.

'The appointment of the new Chairman is a matter for the Board of the Building Society, which includes two public directors appointed under the Credit Institutions (Financial Support) scheme,' the brief statement said.