The Central Bank spent more than €24m on its investigation and inquiry into regulatory breaches at the now defunct Irish Nationwide Building Society (INBS), which lasted 15 years from 2010 to 2025.
In its final report on the process, published today, the regulator also said the lender's former finance director Stan Purcell has been disqualified for four years from being concerned in the management of a regulated financial firm and fined €130,000 for his role in the breaches.
The Central Bank will apply to the High Court to confirm this decision, as required by law, and it will not take effect unless confirmed.
In addition to Mr Purcell, the inquiry into the bank focused on the roles of four other former executives; managing director Michael Fingleton, chairman Michael Walsh, INBS's one-time head of UK lending Gary McCollum, and head of commercial lending Tom McMenamin.
The inquiry previously reached settlements with three of the executives, which involved them being disqualified from having a management role in a regulated financial firm and receiving fines.
Michael Walsh was disqualified for three years and fined €20,000.
The disqualification time given to Tom McMenamin was 18 years and he was fined €23,000, while Gary McCollum was disqualified for 15 years and fined €200,000.
However, in 2019 the inquiry decided to put a permanent stay on its case against Michael Fingleton on medical grounds.
More than 40 regulatory breaches
The Central Bank inquiry determined that the former INBS executives were involved in more than 40 regulatory breaches that included not following the lender's credit policy when approving loans or not having sufficient lending policies in place.
It noted that "there were systematic regulatory breaches at every stage of the INBS commercial lending process".
It also found loans were being advanced without having proper guarantees in place.
For example, the Central Bank said INBS handed out large sums based on getting a share of profits if an asset was sold or refinanced, meaning the only security taken was the market value of asset.
With many of these so-called profit-share arrangements no interest or capital was paid to the bank, and no security guarantees were in place.
The regulator said that in June 2008 around 65% of INBS's loan book was made up of such lending agreements.
It said the scale of this type of lending "made it impossible for any board to properly consider individual loans".
One example cited is the October 2006 board meeting of INBS where 38 loans valued at more than €500m were approved.
It added that INBS was supposed to be getting personal guarantees from company directors in these cases but did not do that.
The inquiry also found INBS's credit committee "failed to do its job of credit risk management".
INBS collapsed during the financial crisis, costing the taxpayer €5.4 billion.
Total cost of inquiry hits €24.2m
In relation to the cost of the Central Bank's investigation and inquiry, a total of €24.2m was spent.
This included investigation costs of almost €5m between 2010 and 2015. Consultants EY received nearly €4.3m of this.
The cost of the inquiry itself, from 2015 to 2025, was just over €16.5, while litigation costs from the process came to around €2.7m.
Commenting on the publication of today's report and decision, Governor of the Central Bank Gabriel Makhlouf said "it concludes an important enforcement action taken by the Central Bank in the public interest".
"It is critical to public trust and confidence in financial services that there is a credible threat of such enforcement for firms and individuals who break the rules put in place to protect consumers and the stability of the financial system," the Central Bank Governor said.
"The sanctions imposed by the inquiry and through the settlements with INBS and the other individuals highlight the important position of senior role holders and board members in the financial industry," he said.
"The Inquiry Decision shows the very serious impact failures at board level can have and provides valuable lessons to senior role holders in the financial services industry. It is essential that such key role holders take responsibility for and drive effective risk management and strong governance," he stated.
In relation to the costs, Mr Makhlouf said they "reflect its length (15 years) and complexity, including the extensive work to unearth the facts through a large volume of documentation and witness evidence, and the need to defend the statutory framework in the face of court challenges by persons under inquiry".
"The lessons learnt have led to changes to the legislative framework, which have introduced efficiencies and further safeguards, including the Individual Accountability Framework," he said.
"The Central Bank will continue to use the full extent of its powers to enforce the rules put in place to protect consumers, the integrity of our markets and the stability of the financial system that serves our society," he added.
