The former head of banking supervision at the Financial Regulator has rejected suggestions that it took no action over concerns it had relating to Irish Nationwide Building Society.

Con Horan had been head of banking supervision at the Financial Regulator since 2003, before becoming prudential director in 2006.

Speaking at the Central Bank inquiry into the defunct lender, he said that there were concerns about INBS' ability to properly manage its then rapidly growing commercial loan book, as well as its over-reliance on its managing director Michael Fingleton.

Asked by Mr Fingleton why the regulator had not take action, or threaten to take action, over its concerns, Mr Horan said that he believed they had.

He cited two increases in the bank's capital ratio - the amount of money it needed to have compared to the amount it loaned out - in 2004 and 2008 as an example of this.

He said those increases were unique at the time and, even in the context of today's tighter regulatory environment, would be seen as "very significant actions".

Mr Fingleton said that the changes did not impinge on its ability to lend or grow and did not represent a sanction on the building society.

However, Mr Horan said the increases would have sent a signal to the wider market and there was concern within the society itself that they would impact its business.

Mr Horan also pointed to proposals on corporate governance that he had drawn up, which he said would have given them more flexibility to deal with the way a lender was managed.

But, he said, these were not accepted by the board of the regulator.