Hindsight is a wonderful thing, but it is still worth pondering how a man whose nickname was \u201cFingers\u201d could be left in charge of a building society for 38 years, eventually driving it into the ground at a cost of \u20ac5.4 billion to the taxpayer. <\/p>\n
Michael Fingleton<\/a> was known for courting the media, giving freelance journalists mortgages \u2013 at a significant premium to the market interest rates \u2013 when other lenders were reluctant to do so. <\/p>\n But his ability to circumvent normal lending practices at Irish Nationwide<\/a> to curry favour with the media was just the tip of the iceberg. It may have shielded him from some unfavourable coverage, but the malaise that allowed him to take over and bankrupt a building society was far more widely spread than that. <\/p>\n The reluctance to challenge the institutional power that characterised Ireland in the 1980s and 1990s extended well beyond the Catholic Church and into politics and business. The mirage of probity that protected these institutions from scrutiny was part of the Fingleton story.<\/p>\n It is the reason nobody shouted stop as the former seminarian took control of a building society set up in 1873 to help people buy homes and turned it into a profligate lender to property developers. <\/p>\n It didn\u2019t happen overnight. Fingleton joined the society in 1971 \u2013 from Concern where he had worked in Biafra \u2013 as its senior executive. He greatly expanded its branch network and loan book over the next 20 years, changing the name from Irish Independent Building Society to the more ambitious sounding Irish Nationwide. <\/p>\n Come the 1990s and the changes that allowed building societies to lend for house building and construction, he got progressively closer to several Irish developers and followed them to the UK. By the time it collapsed in 2008, Irish Nationwide\u2019s commercial loan book was reported at \u20ac8.18 billion, nearly 80 per cent of all loans. He also got richer, amassing a personal fortune put at \u20ac75 million, including a \u20ac30 million pension pot. <\/p>\n This all happened in plain daylight. Fingleton concentrated power in his own hands and surrounded himself with a compliant board under the purview of the Central Bank of Ireland<\/a> \u2013 and its successors \u2013 which adopted a light-touch, relationship-based approach to regulating banks. <\/p>\n This deferential approach to regulation assumed that the people who ran and presided over financial institutions were prudent and honest. It echoed, in a way, the obsequiousness that characterised Irish society\u2019s attitude to the Catholic Church and other institutions. <\/p>\n This was, after all, the State that had a taoiseach nicknamed \u201cThe Boss<\/a>\u201d, who was manifestly living beyond his means in a north Co Dublin Georgian mansion.<\/p>\n The hands-off approach continued with the creation of the Irish Financial Services Regulatory Authority (Ifsra) in 2003 and its now much vilified \u201cprinciples-based\u201d approach.<\/p>\n Despite the new body being intended to give confidence that the rapidly expanding financial services sector was subject to the necessary oversight, the Ifsra adopted the lightest possible light-touch approach. The extent to which Fingleton and others influenced the approach of the new regime remains parked in the \u201clet\u2019s not go there\u201d box when it comes to poring over the entrails of the 2008 crash.<\/p>\n But three separate banking inquiries and reviews found examples of how concerns raised with the new regulators about the management of Irish Nationwide were, in effect, swatted away by Fingleton under the light-touch regime. <\/p>\n This was despite the start of a stream of revelations in banking and elsewhere. The Ansbacher scandal had exposed Haughey as a man of straw, highlighting endemic corruption in the banking system which was further exposed by the Dirt deposit interest retention tax scandal in 1998.<\/p>\n But it took a global financial collapse to reveal what had been staring us in the face: we had a banking system riddled with corruption and incompetence and overseen by a feeble regulator with a culture of servility that matched that shown elsewhere by the State. <\/p>\n