If the bells-and-whistles announcement that the Bank of Ireland had been slapped with a €100.5 million fine for its mishandling of the tracker mortgage scandal was meant to pacify Seán and Maura Citizen, it failed to have the desired effect.
The man or woman in the street knows only too well that a fine on the banks will only be paid by one cohort of people in the long run – the long-suffering customer.
The Central Bank has by now levied punishment fines totalling €278 million on seven lending institutions that together denied more than 41,000 borrowers of their right to cheaper loans or, even worse, put them on the wrong rate entirely.
Irish lenders were found to have adapted unclear and ambiguous mortgage documentation to avoid allowing customers to avail of tracker benefits. The Bank of Ireland fine, the largest of all, is the last in a series that, not surprisingly, the banking lobby is anxious to close off as a ‘milestone day’, marking the end of a chapter that warrants no further discussion except for a promise not to sin again.
There were the usual mea culpas, the obligatory grovelling apologies, the admission that the bankers fell short of their usual pristine standards of behaviour. From now on, the emphasis would be on rebuilding the confidence of customers and wider society, of being more customer focused, on regaining trust, on ensuring that this untypical slippage in standards would not be repeated.
At the heart of the public cynicism at such window dressing is the knowledge that, no matter how denunciatory the tone of condemnation, no single individual will ever be held accountable for the dark deeds of corporate wrongdoing. No bank executive will forfeit their salary or face mandatory demotion or themselves behind bars for their willing complicity in defrauding the customer.
At the moment, and four full years after it was promised, a new Accountability Bill is making its way through the Oireachtas. The bill, when enacted, will make it easier for the Central Bank to hold individuals to account. It will not be retrospective, meaning that those responsible for the tracker-mortgage scandal will go unscathed. And, unless it passes into law before the next general election, it dies in the water.
The culture of impunity which bank executives have enjoyed for too long is crying out for revision, but whether the Government is keen to grasp the nettle is another matter. The Central Bank is pushing for a regulatory regime with real teeth and which would call out individual executives who up to now can find refuge behind the brass plate. Bankers are well versed in expressions of penitence and breast beating when their wrongdoing is revealed, but they are not so eager for the type of governance whereby individuals can be named and exposed.
Until that legislation is passed, headline announcements of fines being imposed and bankers being censured will count for little. The average citizen knows only too well where the buck stops when banks or insurance companies or statutory bodies are hit with punishment fines. Not unlike the Government’s recent, ill-advised concrete-blocks levy, the trickle down effect means that the burden falls eventually on the foot soldiers of the economy.
The Bank of Ireland ‘fine’ amounts to nothing more than a transfer of wealth from a financial institution to the coffers of the State, which, for all intents and purposes, ends up being a levy on the ordinary taxpayer.