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MATTHEW ELDERFIELD TOLD the Public Accounts Committee today that the Central Bank faces a challenge to keep its best-skilled staff because of a “difficult pay environment”.
It is a battle and a struggle, he said.
Currently, the Central Bank employs 620 people. That is fewer than the 750 the deputy governor said would be required for a robust regulatory service. However, he explained his initial estimate could be trimmed down to 600 because tasks performed in relation to the Troika and the bailout programme will begin to “roll off” shortly.
Warning politicians that the regulator will always be playing catch-up with the industry, Elderfield said the moment of risk for Ireland will be when another “bubble” occurs.
“Regulators are an irritant,” he said. If people complain about the processes, there have to be questions asked about their motives, he explained, and policymakers must be “wary of amnesia when it comes to financial crisis”.
In his opening address, Elderfield told the sitting TDs:
…can I just sound a note of caution at the outset: while good progress has been made in improving financial regulation and supervision in Ireland, we are by no means all the way there yet. Indeed, as a supervisor you are almost always playing catch up with industry and it is dangerous to think you will get to a point when you can rest on your laurels.
“It’s also especially important to be vigilant against backsliding and attempts to compromise the independence or dilute the diligence of regulation, especially when times start to get good.”
Bailout II?
Elderfield would not be drawn on his opinion on whether Ireland will require a further bailout.
The banks are going to need more capital in the future, he conceded, but the question is how soon that position will arrive and can the banks “get their on their own?”
“We know there are more losses to come in the banks,” he noted, adding that it is unclear if there is currently “enough in the pot” to cover them. That is something that will be examined during the Central Bank’s next stress tests.
The big unknown for banks is how they will be impacted by insolvency legislation, according to the regulator.
Mortgage arrears
Elderfield has been vocal in the past about his frustrations with the lack of progress made by Irish banks on the mortgage arrears crisis and he reiterated those concerns this afternoon.
In response to a question from deputy Paul Connayghton, he repeated his belief that repossessions will rise in the coming year.
The Central Bank is focussed on ensuring lenders are providing sustainable solutions to troubled homeowners. The regulator wants to see a heightened effort to speed up the process and offer more options. A blanket approach of short-term, interest-only loans is not acceptable, said the deputy governor.
At the end of December last year, just 52 split mortgages had been put in place by lenders.
“Unfortunately, there will be repossessions,” he continued, noting that some people’s situations will be “so bad” or that some clients do not engage with the bank at all.
“We do have to steal ourselves for a significant increase in repossessions. It is not desirable and a last resort…There will also be more voluntary surrenders.”
On his watch
Today marked Elderfield’s probable last appearance in front of the PAC as he leaves the job in October. He outlined to Deputy Shane Ross that his reasons for resigning were personal and not related to the work of the Central Bank.
“I know there is unfinished business,” he said. “I debated a lot about it. I know there are still challenges ahead.”
He noted that there were a number of friends and family lobbying for his return to London.
Looking back at the “fateful night” of the bank guarantee, Elderfield said he could not make a “hindsight judgement” about whether the collapse of the Irish economy would have happened under his supervision.
However, he noted that if the supervisory and regulatory framework – including the bank wind-up regime – that is currently in place was established, the government would have known that Anglo Irish Bank was not solvent and that Irish Nationwide Building Society was in trouble.
During the hearing, he also called for a review of how Ireland handles white collar crime cases. He said past cases did not deal sufficiently with individuals.
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One big problem in Ireland (Not entirely related to this article) is women with kids are encouraged to stay at home and have to depend on their husbands as creche fees are absolutely absurd. The price to put 2 children into my local creche is €1800 per month. This means that skilled women (in some cases men) are staying at home!
In Belgium they are subsidized so that they can work. Even a house cleaner is subsidized. This kind of system stops women having to stay at home to look after the kids and carry out house work and most importantly getting bullied by an unfair husband!
I don’t think subsidies are the way to go here. people here have this ‘the state should pay for my lifestyle choices’ mentality. Isn’t ireland broke? Why not pay a nanny to look after the kids when you are at work instead? have you a family support network, whereby your parents could help out?
Why didn’t you think of the costs a child involves before you had 2 children in the first place? people in westernized welfare state countries seem to just have kids and expect everyone else to pay for it. This doesn’t happen in the US, and it sure as heck doesn’t happen in any realistic state that doesn’t want to end up in the hands of the IMF.
No Lizzy.
Subsidies are the way to go if it means skilled women are going to be working and paying taxes, this will help Ireland. There are women with PHD’s that are staying at home to look after the kids as its not viable to put them into a creche. This is an awful waste of good skill.
No I don’t have a family support network, My parents are gone and my siblings have emigrated.
Also I don’t have 2 kids, I’m thinking about having kids so I suppose I did think of the costs a child involves as I went away and investigated it.
I was simply stating that the system that exists in Belgium encourages women to work and put their children into childcare rather than depending on their husband just in case the partnership falls apart.
It’s a bit of a tangent, but outside of medicine, I’ve never met anyone with a PhD who created anything
On the issue itself; Subsidies = cash, right? Why not make childcare tax deductible? “The people” abuse free cash just as surely as “the politicians.”
Wrong Chuck, in this case Subsidies does NOT= cash!
In Belgium is costs around €250 to send your child to a creche for the month, It costs this little as it is subsidised by the government. This is certainly the case in Kortrijk.
People pay a lot more tax over there alright but their system seems to work alot better than ours when you count in all the subsidies.
@ Lizzie
Clueless comments really.
Many countries subsidize child care, Belgium, Finland, Sweden, Germany, France and many others.
@ Chuck
“I’ve never met anyone with a PhD who created anything”
Astonishing. Who do you think develops pharmaceuticals? Medical devices? Computers? etc etc etc
“It’s a bit of a tangent, but outside of medicine, I’ve never met anyone with a PhD who created anything”
Read the 7th, 8th, 9th & 10th words there…….
I cannot believe it was only in 1990 that rape within a marriage was ok, if a guy had of tried it he would had swiftly got to meet my friend the baseball bat, I know some one who was raped within a marriage and it changed the person she was and the relationship she had with her child was destroyed
No offense to the Irish generation above me, but you guys have so much crap that you should be ashamed of. On a regular basis I’m thankful that I didn’t have to live into that kind of Ireland.
And in fairness I’ve little doubt the same applied to alot of other small countries too.
We still have a long way to go but we’re making progress.
don’t be so sure that the current generation is without it’s faults and skeletons in it’s closets.
It’s great for you to look back and say the past generations had so much crap but alot of this continous and people in their 20′s now are just as capable of doing the same stuff that people did 40-50 years ago and they do.
True, but at least now,with Internet, immigration and improves technology answer education we’re more influenced by the outside and don’t hold onto ideas and assumptions about how things should be as much.
But yea I’ve little doubt the next generation will look back at massive aspects of our lives and wonder “what the hell were they thinking “.
Adrian your living in a dream world with that reproachful look you throw at the past Irish, and the self congratulation of the present. It’s only because of outside influences that Ireland has OSTENSIBLY changed… the EU, internet and the piles of money invested here which allowed thousands travel and form their own identities free of toxic influences form the collective here.
Some things have changed, but we haven’t moved on that much as a nation, despite outside and technological advances. Still ruled by the corrupt, still women get less pay, less opportunites, still lots of pressure to conform, still poor people and the vulnerable are raped in many other ways then sexually,
and if you haven’t occassionaly fought to change the system that is here, you are just as guilty as anyone in the past. if you have, good on ya!
Well done to the women who have come forward with this story, hopefully you are healing now after all the abuse and shame on the men of this country who did this damage to there wives and families , thankfully we are a society who now can get help with most things and move forward……..well done to OWN try and keep going even though you have little funding .
Thumbs up if you blame the church!
What a dumb comment! Sigh….
I am ashamed of being a man
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