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2 April 1998 Edition

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Workers in struggle: Banker robbers

Irish banking system must be state owned



     
These practices are entirely consistent with banking culture which is characterised by intensive competition, not only between banks but also between branches of the same bank, driven by the constant demand and pressure from higher management for increased profits.
It is not just National Irish Bank (NIB) that stands in the dock this week, it is also the entire Irish private sector banking system. It would be too comforting to believe that the revelations about bank officials stealing from customers' accounts to boost profitability was just an isolated occurrence in the odd rural NIB branch.
The NIB scandal has implications for all private banks as it shows just how much latitude the private sector banking system has for profiteering from its customers. The scandal also shows the ineffectiveness of the Central Bank and the Dublin Government who are supposed to regulate the banking sector.

Mary Harney, the minister for Enterprise, Trade and Employment, has got High Court approval this week for an inspector to be appointed to investigate the allegations into NIB activities over the past 10 years. Yesterday the Director of Consumer Affairs has announced a series of spot checks on all other banks to test whether the charges they impose on customers are fair. Detectives from the Bureau of Fraud Investigations also began their enquiries this week into the fraudulent activities at NIB.

What happens now?



It is right that there should be a full investigation into the activities at NIB. The situation in other banks must also be investigated thoroughly. The NIB officials who exposed the fraud in the bank emphasised how it was part of the culture in the bank and those who engaged in the fraud were on track for promotion into senior management positions. What must be found out is whether this is the case in other banks.

The government's role is also crucial. Their regulation mechanism for the banking system has clearly failed. The Central Bank has been shown to be an ineffective regulator.

Some of these issues were raised by Sinn Féin TD Caoimhghín O Caoláin in the Leinster House debate on the NIB fraud. As a former bank official, O Caoláin told the TDs that he was ``not surprised'' at the NIB scandal.

Banking culture


O Caoláin said ``These practices are entirely consistent with banking culture which is characterised by intensive competition, not only between banks but also between branches of the same bank, driven by the constant demand and pressure from higher management for increased profits. Interest is piled upon interest and charges are manipulated and it is predominantly the smaller customer of the bank who is the victim.''

Sinn Féin's Dublin South West representative Seán Crowe also raised the issue especially in terms of one of his local NIB branches in Walkinstown. He called on them to ``immediately assure customers that they haven't been victims of their head offices unique line in creative borrowing'.

State Bank


One solution that has not been explored is for the Dublin Government to consider nationalising the banking system. The banking system is a highly profitable national resource and if NIB are proved to have abused their position of economic power they should lose their licence.

At the very least the Irish public should be given the choice of giving their money and custom to a state bank. The Dublin Government should use the NIB debacle to regain momentum towards creating a state bank. NIB's branch network could be a vital part of it.

Oh no, I've been interest loaded


Forget GUBU. A new term has entered Irish public life - ``interest loading''. A rough translation into spoken English would give you alternatives such as robbery, stealing and thieving. You can add in the words defrauding, deceiving and dissembling.

So now when your house is broken into or your wallet robbed you can relate it quickly and concisely by explaining that you were simply interest loaded as in `my car was interest loaded last night'.

The term was born by NIB management when acknowledging the systematic pilfering of customer accounts by officials at the bank. We now expect the term to enter common usage in the media. So bank robberies will be reported more concisely as ``an interest loading raid was carried out today'', or ``armed interest loaders escaped with a six figure sum of money today''.

Alternatively you can now brush off complaints about your own wrong doings as ``nothing worse than the odd bit of interest loading''. A greedy person would be a high interest loader. Petty criminals will be called low interest loaders. On the other hand serious defrauders, robbers and thieves can now be described by the more generic term of bankers.


Permanent bonus


It's April and if spring isn't in the air it certainly is in the steps of Irish Permanent's three executive directors. Roy Douglas, Peter Fitzpatrick and Peter Ledbetter took home a shared bonus of £1.2 million last year on top of six figure basic salaries.

Chief Executive Roy Douglas received a long-term bonus payment of £454,612 while Fitzpatrick and Ledbetter shared a bonus payment of £764,512. Five other senior managers shared £800,000.

Douglas's basic salary was £215,837. On top of this he earned fees of £21,432, benefits of £20,040 as well as a performance-related bonus of £57,764. It's interesting how many different ways the corporate fat cats can be paid these days while those lucky enough to have a job subsist on mere wages. The fees alone paid to Douglas are thousands of pounds above the average industrial wage.

Good roadholding


One of the forgotten aspects of privatisation in Ireland is that our road network is slowly being privatised. The tollbooths at the East and Westlink bridges are the visible sign of this back door privatisation programme.

National Toll Roads, which operates the booths, does so under licence from the Dublin Government. Last year they handed over £2.4 million in earnings for the 26-County Exchequer. Not bad going until you considered the £11.3 million in profits National Toll Roads earned last year.

It seems that road privatisation is treading the well worn path of other more high profile sell-offs in that huge profits are earned by the private sector owners while the Irish public who should own these profit earning resources take home the small change.

Skills shortage



Here's an interesting question that is keeping us awake at night in An Phoblacht. Yet again we have read of a skills shortage in Ireland's growing computer sector. Last week it was the turn of the Irish Software Association to sound a warning. We are, it seems, already short some 2,000 workers.

At the same time there are over 40,000 people on various work schemes in the 26 counties. Could it be true that none of these are going to end their scheme with the necessary qualifications needed to work in the Software industry? The answer is, it seems, no. They are not qualified to work in this supposedly vital economic sector. Could it be really true that many of these schemes really were make-work dole massaging? Now that really would be an example of welfare fraud.

An Phoblacht
44 Parnell Sq.
Dublin 1
Ireland