I CAN’T help wondering what it feels like for staff in the Central Bank/Financial Services Authority of Ireland having Patrick Honohan as the new governor.

The former Trinity College economics professor has been hugely critical in the past about the performance – or lack of it – of the regulatory body and presumably most senior staff know what he thinks of their performance over recent times.

The following comes from a note for the World Bank that Honohan wrote in May, entitled What Went Wrong in Ireland?

“Bank regulation, although on the surface compliant with international standards (IMF 2006), was complacent and permissive. Certainly it should have impeded the growth of Anglo Irish Bank.

“And it should have acted more vigorously to restrain the relaxation of lending standards: by 2006, fully two-thirds of loans to first-time buyers had loan-to-value ratios in excess of 90 per cent; one-third were getting 100 per cent loans.

“Regulatory stress tests were too timid (for example employing only a 20 per cent fall in house prices).

“Undue regulatory reliance was placed on banks’ internal risk models, without apparent exercise of supervisory discretion, even when the most reckless loans were being made to property developers in blocks of up to several hundred million euro for prime land,” Honohan concludes.

Sometimes it is probably better not to know what your boss thinks.