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McCreevy, Charlie

Wednesday, 6 February 2002

Dáil Éireann Debate
Vol. 547 Nbr. 4

Private Notice Questions. - Banking Fraud.

The primary responsibility for managing a bank and preventing fraud lies with the management of that institution. No regulatory authority can put in place a supervisory regime to ensure that a fina...More Button

I am also advised that AIB's capital position is strong and is comfortably within established limits. There is no threat to account holders or to the solvency of the bank. From the point of view of...More Button

There may also be lessons for legislators, and these should be digested and acted upon. I have asked the Central Bank to report to me, in the light of these events and their own investigations, on ...More Button

I am relying on information supplied to me by the governor of the Central Bank and I heard most of the press conference of the chief executive of AIB Group this morning. The Deputy asked whether I ...More Button

As I understand from the press conference, the complex nature of the fraud made it very difficult for the bank's management to get to grips with it. As I said in my statement, questions have been r...More Button

I will answer the three specific points raised by the Deputy in the second part of my intervention. Over the past number of years there has been debate in this House and outside on the proper mix b...More Button

With the growth of complexity in financial products and engineered financial products, it is becoming increasingly difficult for the supervisory authorities and the management of institutions to ke...More Button

Deputy McDowell, Deputy Noonan and I have had a debate for some time about the proper way for the Central Bank legislation to proceed. As a result of the NIB matter, which was a consumer issue rath...More Button

The overall hit to AIB is a blow to its earnings for 2001. I understand the bank decided, for accounting reasons, to take a hit in the 2001 profits thereby reducing them but it will be a one-off hi...More Button

It is a matter for AIB in the first instance to review its internal procedures in these matters. I heard Mr. Buckley explaining this morning that the complexity of the fraud is such that it was ver...More Button

It is not fair to compare the DIRT matter to this incident. The DIRT matter was one on which there was considerable difference of opinion between people in AIB and other financial institutions as t...More Button

With respect to Deputy Flanagan, I do not know what accountancy training now forms part of the solicitor's courses, but there is certainly an accountancy element to it. There certainly was in my da...More Button

This—More Button

(Interruptions.)More Button

This is not to set-off against tax. It will be an expense in the profit and loss accounts of the AIB group, the same as in Deputy Flanagan's business if he is paying staff in Portlaoise that are no...More Button

The profits of AIB – which are expected to be in the order of £1.4 billion – will be reduced. It will take it all back against the 2001 figures the same as the bank, or any other ...More Button

With regard to pension funds I heard what the chief executive of the Irish Association of Investment Managers said at lunch time. He spelled out what the situation is here, that no pension fund ove...More Button

The Deputy raised a question as to what lesson had been learned regarding the Nick Leeson-Barings Bank debacle of recent times. All of the financial institutions have tried to put in procedures tha...More Button

With regard to the new Bill, it has been with the Chief Parliamentary Counsel for some time and was returned in recent days. It runs to more than 200 pages already. There have been consultations wi...More Button

This matter will have to be addressed by the US federal authorities, as the body charged with the regulation of banks within their sector.More Button

Yes. In the same way as the federal authorities in the US, the Irish Central Bank is the primary regulatory authority for the Irish subsidiaries of foreign banks, such as those of Germany, France a...More Button

The current situation in AIB's US subsidiary is, in the first instance, a matter for the Federal Reserve in the United States.More Button

Yes, just as the German central bank has a role in relation to the group business of a large German bank subsidiary in Ireland. The Irish Central Bank has visited the US to meet the Federal Reserv...More Button

As I made clear in my reply, irrespective of any new Bill, this situation occurred in a bank in the United States. It has no bearing at all on whether we had a new Bill or greater emphasis on consu...More Button

I had not thought this would become a debate on accountancy practices. There are many farmers in County Westmeath. Would the Deputy expect them to pay tax on losses? If a farmer from the county has...More Button

One pays tax only when one makes a profit. On that basis, people in the business of selling, buying and lending money are in the same business as farmers who sell and buy cattle and shopkeepers who...More Button

The Deputy referred to the Basle and EU guidelines. These require that banks hold certain and minimum amounts of capital. This capital must be held in specified types of assets to ensure that in th...More Button

The impact is to reduce AIB Group's tier one capital ratio at 31 December, 2001 from 7.2% to 6.4% with total capital reducing from 10.8% to 9.9%. The Allfirst tier one capital ratio reduces from 10...More Button

Let us look at this another way. I do not believe the city of London's reputation suffered to a large extent when Mr. Leeson caused difficulties for Barings. The reputation of the city of London wa...More Button

Élan's difficulties resulted from the new scrutiny of accounting practices that came about following the collapse of Enron in the United States. The latter company had a market capitalised v...More Button

AIB's share price fell by approximately 10% this morning and by 1.30 p.m. it had fallen by 16%. This reflects the view the market has taken of events. I am not going to advise people to either buy ...More Button

I have not communicated directly with AIB. My information on this matter came from the governor of the Central Bank, from a press conference held by AIB earlier today and from my Department. As the...More Button

The first part of the Deputy's question relates to putting in place procedures to ensure—More Button

The Deputy must realise that it is not possible for me to give the assurance he is seeking at 5 p.m. on a Wednesday. Even AIB, which is directly involved, was at pains to avoid stating explicitly t...More Button

In the first instance, AIB management is doing its best to discover the extent of the liability. Management representatives will report on that matter to the regulatory authorities both here and in...More Button

Written Answers follows Adjournment Debate.More Button

Written Answers. - Departmental Staff.

Was asked: if his Department operates term time; the number of persons who applied for this in 2000, 2001 and 2002; the number of persons who were accepted and availed themselves of the scheme; if persons wer...More Button

A pilot scheme of term time working has been in operation in my Department since June 2000. The following schedule gives an outline of the applications for the years 2000, 2001 and 2002.More Button

In general my Department has led the way in introducing family friendly policies such as term time in the Civil Service. Every effort is made to accommodate staff in this regard as is evident from ...More Button

Written Answers. - Flood Relief.

Was asked: the position regarding the report on flood relief work in Arklow, County Wicklow; when this report will be published; if funding has been allocated for work; when this work will be carried out; and...More Button

Arklow Urban District Council has commissioned a report on flooding in Arklow. The report is expected to be completed in the next month or so. The Office of Public Works has allocated an amount of ...More Button