A former Finance Director at Irish Nationwide Building Society has denied allegations relating to him in connection with alleged regulatory breaches relating to lending practices by senior management at the institution in the years leading up to the financial crash.
Delivering his opening statement at the resumption of the Central Bank inquiry investigating commercial lending decisions at INBS, John Stanley Purcell said the responsibility to ensure compliance with credit policy rested with the underwriter and ultimately with a senior commercial lender.
Dealing with allegations relating to the signing of debit agreements, Mr Purcell said signing such a document was not an approval in line with Irish Nationwide policy.
The inquiry heard earlier today from a member of the legal team for the inquiry, Eoin McCullough, in relation to the remaining four of seven sets of alleged regulatory breaches.
These include allegations that the bank failed to process loans in line with policies or to get proper valuation reports on assets it was lending against, as well as failing to establish credit risk policies in relation to developers.
Mr McCullough said it appeared INBS had failed to get adequate information from a number of major commercial property clients demonstrating that they had the capacity to repay their loans.
Addressing the bank's 2003 credit risk policy, John Stanley Purcell said its purpose was to provide a set of guidelines to ensure that all credit put forward met minimum pre-agreed standards.
The policy on commercial lending guidelines, he said, stated that they were 'only guidelines'.
The credit risk policy did not mention or give guidelines on LTVs (loan to value) on commercial loans, he added.
The risk policy was in place until February 2007. A commercial lending policy came into existence at the end of that month.
This, Mr Purcell claimed, was also a guideline and that the lending sector criteria were also a guide.
Mr Purcell clarified to the hearing that he had never been a member of the credit committee at Irish Nationwide.
Inquiry now in final stage
The original purpose of the Central Bank inquiry - which started three years ago and is now in its final phase - was to investigate suspected regulatory breaches by five of the senior management at INBS.
Two of the five - former chairman, Michael Walsh and a former head of commercial lending, Tom McMenamin - have already settled with the Central Bank and are no longer subject to the inquiry.
The investigation into former chief executive, Michael Fingleton, has been discontinued owing to ill health.
That leaves just Mr Purcell and the former head of UK lending, Gary McCollum, who is now scheduled to give his opening statement on Tuesday.
The inquiry has now been adjourned until Tuesday morning when it will hear from Mr McCollum before going into private session.