A SEVERE cap will be placed on the salaries of top bankers following the Government’s decision to recapitalise AIB and Bank of Ireland, Green Party leader and Minister for the Environment, John Gormley, said yesterday.
“The issue of remuneration for bankers has to be tackled and it will be tackled,” said Mr Gormley, who added that the matter had been discussed at Cabinet and that there was a general view that the issue should be dealt with.
“What we need is root and branch reform,” said the Minister, who added that the Government had acted not to bail out the bankers but to recapitalise the banks in the national interest.
He said that the impression had been created that there was a tolerance for white-collar crime in this country. “It would appear people thought they could act with impunity. That situation cannot and will not continue.”
He added that if the laws were not strong enough to deal with the situation that had been uncovered in banking, then additional powers would be forthcoming. “People in all walks of life had to be accountable and those who transgress brought to justice. I have no doubt that will happen,” he said.
Mr Gormley said there was no question of Bank of Ireland and AIB pocketing the €7 billion provided by the Government to recapitalise them. He said there was no “get out clause” for the banks under the agreement which came with conditions regarding house repossessions, a cap on remuneration and lending to small businesses.
Mr Gormley also said there was a need to create the most comprehensive regulatory system in the world.
Fine Gael leader Enda Kenny has called on the board of the Financial Regulator to resign as part of what he described as a series of confidence-building measures for Irish banking.
Mr Kenny said there was a growing sense the Financial Regulator’s office was “aware of, and turned a blind eye to, the presentation of deceitful accounts by Anglo on foot of the Irish Life and Permanent/Anglo transfer back in September”.
Speaking in Cork at a selection convention for Fine Gael candidates for the European Parliament elections in June, Mr Kenny said trust and confidence were the cornerstones of a properly functioning banking system.
“Both domestically and internationally, that trust has been destroyed. That is because of reckless banking practices, ineffective regulatory oversight and basic political incompetence at Governmental level.
“Last week in the Dáil I said that the Minister for Finance should resign when he revealed that he hadn’t read the PricewaterhouseCoopers report and displayed a level of incompetence that only feeds the lack of trust in our response to this crisis,” Mr Kenny added.
“Faced with a crying need to restore that confidence to our system, and not because of any one individual’s wrongdoings, I believe the board of the regulator and senior management should resign.
“It is not feasible for an investigation of this whole affair to be conducted by the body that was at the heart of the problem,” he said.
