Banking Inquiry to hear from Ulster Bank and bank economists

06/05/2015

The Oireachtas Banking Inquiry will hear from former Ulster Bank executives Michael Torpey and Robert Gallagher, as well as hearing from former bank economists John Beggs, Pat McArdle and Dan McLaughlin as part of its Nexus Phase public hearings tomorrow, Thursday, 7th May.

During the Nexus Phase the Committee is engaging with institutions and individuals who had roles relating to the crisis. It is focusing on three broad elements — Banking Systems & Practices; Regulatory and Supervisory Systems & Practices; and Crisis management systems and policy responses — and how these three elements interacted with each other.

Chairman Ciaran Lynch TD said: “Tomorrow we will continue with hearings with senior bankers who had roles during the crisis when we will hear from former Ulster Bank executives Michael Torpey and Robert Gallagher. Mr Gallagher is a former executive director of Ulster Bank, where he was responsible for the corporate and business franchise, while Mr Torpey was a former finance director at the bank. Among the issues we will consider with Mr Gallagher are: the appropriateness of credit policies, delegated authorities and exception management; impact of property valuation methodologies on the banks credit risk management; the liquidity versus solvency debate; and the appropriateness of the bank guarantee decision. Mr Torpey will be questioned on the integrity of financial reporting; the appropriateness of funding sources; the adequacy of valuation policies and assumptions to accurately assess loan security; the liquidity versus solvency debate; and an analysis of risk concentration in the base and adverse economic scenario and the impact on the capital structure.

“A number of former bank economists will also appear before the Committee tomorrow. Dan McLaughlin was employed by Bank of Ireland in the role of Chief Economist from February 2001 to August 2013. John Beggs was Chief Economist of AIB Global Treasury from 1992 to 2011. He was Chief Economist AIB Bank from 2011 until his retirement in 2012. Pat McArdle is a former Chief Economist with Ulster Bank from 2002 to 2009.

“Our meeting with these economists will focus on a number of issues including: the role of advisors in analysing the crisis and crisis management; the Liquidity versus Solvency debate; the adequacy of the assessment and communication of both solvency and liquidity risk in the banking sector; the appropriateness and effective utilisation of expert advice sought; analysis and response to contrarian views; appropriateness of the macro and prudential policy; appropriateness of property related strategies and risk appetite; and an analysis of risk concentration in the base, the adverse economic scenarios and the impact on capital structure.”

Nexus Phase hearings will run until the middle of September with a total of 64 public hearings planned. It is envisaged that at least 60 witnesses will be called to the public hearings.

Deputy Lynch said: “This phase of our hearings includes a move by the Committee to compelling witnesses and statements and the use of evidence. Under the witness management protocol, there will be a structured witness engagement with a seven week lead-in between the notification and the public hearing. The protocol includes timescales, evidence books and technical briefings.”

The meeting with Michael Torpey and Robert Gallagher will start in Committee Room 1, Leinster House at the later time of 10.30am. The meeting with John Beggs, Pat McArdle and Dan McLaughlin will take place in Committee Room 1 at 3pm.

Further information on the Oireachtas Banking Inquiry can be accessed on this website. Full committee proceedings will be webcast live on this website, while Oireachtas TV will broadcast proceedings from 10.30am-2pm.

Committee proceedings can also be viewed on the move, through the Houses of the Oireachtas Smartphone App, available for Apple and Android devices.

All media enquiries in relation to the Oireachtas Banking Inquiry should be addressed to:

Ciaran Brennan,
Houses of the Oireachtas,
Communications Unit,
Leinster House,
Dublin 2

P: +3531 618 3903
M: 086-0496518
F: +3531 618 4551

All general enquiries should be directed to the Committee Secretariat.

e. contactbankinquiry@oireachtas.ie
t. +353 1 618 3651

Committee Membership

Deputies

Ciarán Lynch (Chairman)
Pearse Doherty
Joe Higgins
Michael McGrath
Eoghan Murphy
Kieran O’Donnell
John Paul Phelan

Senators

Sean D Barrett
Michael D’Arcy
Marc MacSharry
Susan O’Keeffe