The Financial Regulator’s investigation into unusual trading patterns connected to the malicious spreading of false rumours about Irish banks is making progress, chief executive Patrick Neary confirmed today.
Speaking the publication of the Regulator’s annual report for 2007, Mr Neary said there was “a lot of ground to cover” in the investigation. The “crescendo” of rumours has now died down, he added.
The false rumours under investigation are thought to be responsible for a 15 per cent fall in Anglo Irish Bank's share price on March 17th.
Mr Neary said the regulator was working with the Irish Stock Exchange to identify suspicious trades that breach market abuse laws.
He described the ongoing credit crisis has is the "most serious and prolonged disruption" to the financial system in decades and warned that it would continue for some time yet.
In response to the crisis the Regulator has required banks to submit weekly - as opposed to quarterly - liquidity reports.
"As the liquidity issues have persisted this interaction has intensified in terms of our contact with firms and other regulators", he said.
Given the increase in the cost of credit Mr Neary also urged consumers to "think carefully about future affordability and to examine all credit options" before securing a loan.
He said lenders were now required under statutory consumer protection to only provide products suitable for their customers.
Although this move was designed to protect consumers Mr Neary admitted that it may result in some people being refused credit.
"While this is difficult for consumers in the short term it is much better than having a situation where a customer takes on a loan they simply cannot afford to repay," he said.
For consumers who find themselves in difficulty Mr Neary advised them to contact their lender as soon as possible.
"The sooner a problem is identified, the easier it is to find a better repayment schedule." He cautioned against rushing to consolidate debts into one loan.
"These offers can look tempting but can be much more expensive over the life of the loan. Institutions are obliged to point out these additional costs to their customers."
Last year the Regulator analysed over 65,000 financial returns and visited the offices of 500 firms.