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Promises, Promises: The Rampant Lies from Leinster House

06/09/10

Brian LenihanDespite Brian Lenihan’s pledge to bring about “a big change in banking culture” after €7 billion [£5.9 billion] of public money was transferred to the private Allied Irish Bank and Bank of Ireland, a cursory glance at the people at the top of Irish financial institutions today clearly shows that not to be the case.

On the contrary, figures released by a daily newspaper last week indicate that, bar a few individual resignations, the bulk of the financial hierarchy in the Twenty-Six Counties remains in place and the majority of these are earning massive salaries which far outstrip the Dublin government-recommended rates of pay drawn up last year. Regardless of the posturing of political establishment that ‘heads would roll’ it is clear that this has not transpired in any meaningful shape or form.

Of the 12-strong director’s board of the Bank of Ireland in 2007, eight of them have been retained, while almost half of those in charge of running AIB remain in place today. A particularly notable case is that of Nationwide, which has cost taxpayers in the Twenty-Six Counties over €12 billion [£10 billion] to date. Three of the original five-man board continue to run Nationwide; the departures being disgraced financier Michael Fingleton [who received a €1 million bonus before his resignation] and his deputy, John Purcell.

While the salaries of the banking CEOs have been cut slightly, they remain far in excess of even the Dublin government’s recommendations. Last year, Bank of Ireland CEO Richard Boucher received a total of €1.99 million [£1.7 milion] in salary, associated benefits and a pension top-up. In the same year, AIB director Colm Doherty received €833,000 [£696,000]. Also in 2009, the CEOs of Anglo-Irish Bank and Irish Life and Permanent received €500,000 [£418,000] and €533,000 [£445,000] respectively. These astronomical amounts are being ‘earned’ by bank executives despite the fact that it will eventually cost taxpayers tens of billions of euro to bail out these institutions.

While it will come as no surprise to many that the business class continues to pilfer massive amounts of money, these figures do illustrate the hollow nature of previous government promises to ‘rein in the banks’. In essence, it demonstrates how the political and financial establishment work hand-in-glove and how each is dependent on the other for survival.

The Twenty-Six County government has no problem with diverting billions of euro of public money into these institutions and then subsequently declaring that the state cannot afford to provide vital services for working class citizens.

One thing is clear, meaningful regulation of the banks will never take place unless they are placed firmly in public hands and run solely for the benefit of society as a whole as opposed to the profit of a few.

 

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