FINANCIAL regulator Matthew Elderfield has said he worries about the Central Bank’s ability to recruit sufficiently skilled supervisors and “what will happen” in terms of retaining such skills “when markets recover”.

The financial regulator, who delivered the Galway Chamber of Commerce annual Paddy Ryan memorial lecture last night, said the Central Bank was “working hard to learn the lessons of the past”.

However, the bank had to be realistic in terms of expectations of its supervisors, as “we will make mistakes from time to time”, Mr Elderfield said, speaking in Galway-Mayo Institute of Technology.

A “super-supervisor” should have “the mathematical ability of George Boole to figure out a complex balance sheet, the interviewing skills of a Vincent Browne or Miriam O’Callaghan to get information from tight-lipped chief executive officers and the resilience and toughness of [rugby international] Brian O’Driscoll to deal with bruising encounters with recalcitrant firms”, he continued.

Such a person would also have to have “20 years’ experience at a leading international bank or insurance company”, along with a “healthy dose of professional scepticism”, he said, adding that this “supervisory Frankenstein could be quite difficult to find”.

“At the Central Bank we still need to make a lot of changes to encourage what one of my board members, Mike Soden, describes as ‘open dissent’,” Mr Elderfield said.

“We are still very hierarchical and need to work in a more joined-up way, encouraging debate and challenge between areas. We still are better at analysing risk than challenging ourselves to see if we have landed upon an effective and conclusive mitigation strategy,” he said.

He said his office regulated 14,100 financial services firms, all of which “pose potential risks – to differing degrees – to the economy or to consumers”, he said.

“One of the clear organisational lessons from the crisis then was that we, along with many global regulators, spent too little time rigorously challenging the really high-impact firms – those firms whose failure, even if low probability, can seriously damage the economy of a country.”

He also said there was a need to to improve some basic compliance with a substantial portion of our smaller low impact firms.

“For example, about half of the retail intermediaries who are supposed to file returns with us do not do so.

“That is unacceptable and has to change,”Mr Elderfield said.