Madam, – Your edition of March 11th reports that John Hurley told the Oireachtas Committee on Economic Regulatory Affairs that the Central Bank could issue warnings but had no powers to limit excessive lending and the rapid growth of indebtedness. These powers rested with the Financial Regulator and the Government.
This is true, but Mr Hurley is responsible for financial stability and for providing advice and guidance on Irish economic policy. If he had been concerned he should have advised both the Government (through the Department of Finance) and the Financial Regulator to take action and he could have expected to be consulted on what actions might have been necessary. Did he? Did they refuse his advice?
Although he tries, in my view, to portray himself as a powerless outsider in the financial system, Mr Hurley is the Governor of Central Bank and the Financial Services Authority of Ireland, including the Financial Regulator. Oddly, the Financial Regulator comes under his remit, but is also autonomous. As a former secretary general of the Department of Finance and governor of the bank since 2002 he would have been one of the architects of the regulatory system.
Are we really to believe that he bears no responsibility for the current crisis? Any investigations into the events leading to the collapse of the banking system are doomed to fail if bankers, politicians and public servants seek to protect their own positions and reputations. – Yours, etc,
Madam – When the governor of the Central Bank appeared before the Oireachtas Committee on Economic Regulatory Affairs, he explained that the public exhortations of the Central Bank highlighting risks to financial stability from August 2007 onward were “not as effective as they might have been and they did not lead to a sufficient or timely change in behaviour”. The committee was reminded that the governor is paid an annual salary of €348,000, a figure that reflects the voluntary reduction taken last October from the €368,000 that he had hitherto been paid.
It is interesting to compare the salary for this position with those whose influence on global economic affairs is absolutely pivotal and whose utterances and nuances greatly affect the world investment climate and the effectiveness of economic recovery initiatives.
The US Federal Reserve system consists of 12 federal reserve banks located in major cities throughout the United States, supported by the Federal Reserve Board based in Washington DC. The system as a whole employs almost 20,000 people and the board employs 2,053. The annual salary of the chairman of the Federal Reserve Board, Mr Ber Bernanke, is $191,300 (€150,000), and was approved by the US Congress in February 2008.
The president of the European Central Bank, M Jean-Claude Trichet, oversees a staff of 1,499 and was paid €351,816 last year. He is also provided with a residence, in lieu of a residential allowance, but his salary is subject to EU tax, pension, medical and accident insurance deductions.
The Oireachtas committee observed that the Canadian banking system “had operated quite well with prudential supervision of a high standard”. The Bank of Canada’s governor, Mr David Dodge, whose seven-year term ended on January 31st, was paid on a salary scale with a maximum of 407,900 Canadian dollars (€250,000).
The Central Bank was founded in 1943 and Mr Hurley is the ninth governor. He and seven of his predecessors formerly held the position of secretary general of the Department of Finance. The exception was Mr Maurice Moynihan, co-drafter of the 1937 Constitution and formerly Secretary of the Department of the Taoiseach.
The salary of the governor is therefore influenced by that of the secretary general of the Department of Finance. This was set at €303,000 in September 2007 by the Review Body on Higher Remuneration in the Public Sector; the figure may have been reduced voluntarily by the current incumbent. – Yours, etc,
Madam, – Gerry Ryan has done some “soul-searching” and has decided to take a pay cut which would bring his salary to just over over €500,000 a year. I wonder if his “soul-searching” included what he would get paid in the private sector. In fact, I am wondering if any Government Minister or anyone at RTÉ has considered what the station’s various leading presenters would get paid in the private sector.
It really is just another example of gross economic mismanagement that a country with the population of the greater Manchester area can have people working for a state media organisation receiving such extortionate salaries. Ah, but sure anytime RTÉ runs into economic trouble, can’t the licence fee be increased? Words can’t describe how frustrating it is that such an inequitable situation can exist. – Yours, etc,
Madam, – Pass me the smelling salts! What is happening at the EBS? Resignations on the basis of integrity and accountability at the top of one of our financial institutions! Gleeson, Bowler, Fingleton, Sheehy et al. — are you watching? – Yours, etc,
Madam, – If Mary Harney is to salvage any political credibility, she should resign from the government forthwith. Throughout her career, she has promoted a liberal, free-market model of the economy, the very approach which is largely responsible for our present economic plight. A central plank of this policy has been low direct taxation and a dislike of regulation. As recently as the last general election, we were told by Ms Harney and others that the debate on taxation had been won!
Now, as the government prepares to introduce swingeing increases in both direct and indirect taxes, surely Ms Harney’s position in Cabinet is untenable. In remaining there, she will be rejecting her own political philosophy. – Yours, etc,