Irish Financial Regulator to Retire After Anglo Irish Inquiry

By Ian Guider

Jan. 10 (Bloomberg) -- Ireland’s financial regulator said Chief Executive Officer Patrick Neary will retire as an inquiry showed the agency failed to take “appropriate and timely” action in relation to directors’ loans at Anglo Irish Bank Corp.

Mary O’Dea, the agency’s consumer director, was chosen to be acting head of the watchdog, the Dublin-based Irish Financial Services Regulatory Authority said in a statement late yesterday.

The review of the agency’s “regulatory approach” follows the resignation of Sean Fitzpatrick as Anglo Irish chairman in December after he failed to fully disclose loans from the bank over an eight-year period.

Staff at the agency knew that the loans hadn’t been disclosed to shareholders, the watchdog said after an inquiry. Still, the matter wasn’t pursued because of “pressure on officials from the unfolding of liquidity problems in financial markets and in individual institutions,” the agency said in the statement.

“I was not advised of any such matters in early 2008” and there was “no oral, written or e-mail escalation of these issues to me” until the Finance Ministry raised the issue last month, Neary said in a separate statement. “In taking my decision to retire now, I am conscious of the need to uphold the good standing of the regulator and public confidence in it.”

Ireland’s government last month said it would invest at least 5.5 billion euros ($7.4 billion) in three banks, including Anglo Irish, as part of a rescue package for an industry that was battered by the global financial crisis and mounting bad debt provisions.

‘Low Ebb’

“This resignation may be the first tangible signal that the people in Irish banking that brought our banking system to this low ebb will not and cannot be the people that bring us out of this mess,” said Richard Bruton, finance spokesman for Fine Gael, the country’s biggest opposition political party.

The committee investigating how the regulator handled the issue of the loans at Anglo Irish recommended that it more closely monitor directors’ borrowings and review its internal communications.

Finance Minister Brian Lenihan said in a statement he would “consider” the committee’s report.

To contact the reporter on this story: Ian Guider in Dublin at iguider@bloomberg.net: