Banks' customers may 'regret' nationalisation

THE NATIONALISATION of the banks will be something that the economy and bank customers will “live to regret”, according to the general secretary of Irish Bank Officials’ Association (IBOA).

Speaking at the association’s biennial conference in Dublin, Larry Broderick said that senior management at the banks could not be trusted, and called for fundamental changes to the boards of the banks and how the institutions are run.

“Nobody on the board of AIB has shown any leadership or taken responsibility for the share price of AIB,” Mr Broderick said.

He demanded that the union be given a place at the negotiating table in the talks on the setting up of the State-run National Asset Management Agency (Nama).

“There will be no co-operation with Nama until the IBOA is at the negotiating table,” he said.

He said that the union would not accept compulsory redundancies.

Mr Broderick said that there was “immense anger” within the banking industry as well as among the general public over the “devastation” caused to the Irish banks.

He said that this anger should be directed at senior management.

Mr Broderick said that staff had been put under “relentless pressure” by management to achieve sales targets and this contributed significantly to the banking crisis.

He said that banking was not about “fat cats” or “boards”, adding that it was “an absolute disgrace” to see senior managers retiring on huge pensions when banking jobs were under scrutiny.

IBOA members passed motions in a bid to ensure the banks did not use the crisis to undermine working conditions for their staff and recognising the role played by performance-related pay, short-term profit-taking and bonuses in creating the turmoil in banking.

Performance-related pay and bonuses created “a culture of greed and irresponsibility,” a bank employee told the conference.

An AIB employee said the problem with performance-based pay was “the nature of the performance it rewards”.

She said bonuses should be paid multi-annually to ensure “the long-term interest of the customer rather than the short-term interest of the bank.”

Fergus Reynolds, an employee at Ulster Bank, said that the crisis had its origins in “a series of calamitous decisions” by senior bankers.

He said “an insatiable greed and blind faith in derivatives” had turned Ulster Bank’s parent company, Royal Bank of Scotland, from the sixth largest bank in the world into “a virtual basket case.”

Another speaker said the appointment of staff to bank boards would limit risk-taking.