After all the scandals of recent years, Liam O'Reilly is hoping for a quieter life and to eventually work himself out of a job, writes Siobhán Creaton, Finance Correspondent

Liam O'Reilly has a challenging beat policing the Republic's financial services industry. In the future, he hopes for a little less excitement and eventually aspires to work himself out of a job.

The awkwardly named Irish Financial Services Regulatory Authority he heads, more commonly referred to as the barely pronounceable Ifsra, celebrates its second birthday this week. It now wants to be called the Financial Regulator and is gearing up to make its presence felt in new ways, most visibly by imposing fines and naming and shaming wayward financial institutions.

O'Reilly says he is not sure that the State's financial institutions - which have been found guilty of crimes ranging from facilitating tax evasion to overcharging and mis-selling during his reign - will ever have a perfect reputation. Bankers will always be tarred with the negative connotations attached to the moneylenders in the temple in biblical times, he suspects.

"Where you have a robust industry, you are bound to have problems," he explains. "It is important to say I do not believe the Irish financial services industry is any better or worse than any other. These things happen in all jurisdictions. We can never be certain things won't go wrong."

So how many more scandals should we expect?

"If you are asking me do I know of anything serious that could happen? I would have to say no. But as soon as you walk out the door, someone may be walking up to tell me something. We never know when something is going to break," he says.

The sector's various financial transgressions have made headline news in the Republic for many years and the State's biggest bank, AIB, has had more than its fair share of transgressions, frequently putting it on a collision course with the regulator.

O'Reilly says that AIB's problems are not unique to that organisation as its wider probing of the industry on foot of AIB's difficulties uncovered many other instances of overcharging.

"There are issues in almost every institution. Our priority is to make sure that customers are paid back as soon as possible. They must be written to and that process must be transparent.

"As regulators, we want to make sure that they serve their customers, otherwise we would not be able to move on to the next problem," he says.

O'Reilly believes that working towards changing the culture within the State's financial institutions is one of its central remits.

"We will never get rid of original sin. We all fall down at times. We are not in the business to make sure everyone who falls is punished. It is our job to make sure there are appropriate systems, processes and procedures are in place."

When it comes to tackling the culture, the regulator's efforts are primarily focused on the directors and executives at the top of these companies.

One of the most shocking revelations last year was that two former AIB chief executives, Gerry Scanlan and Tom Mulcahy, and the former chairman of Irish Life & Permanent, Roy Douglas, had tax issues arising from accounts they held in the past.

"The people at the top of an organisation set the tone, culture, standards and values that are pushed down through the group. We want to know they are competent to do the job and that these individuals have a high ethical set of standards."

To this end, anyone who is appointed to serve on the board of a financial institution must submit their personal details, including a reference from their bank manager, and declare their bank accounts to the regulator.

"We are not trying to see what they spend their money on but it is more from a financial acumen point of view," he explains.

The reason why it wants to know how many bank accounts they hold is that, if they were to be embroiled in fraudulent activities, it is too late to seek out that information on the day they run away, according to O'Reilly.

The regulator has set down what O'Reilly describes as a programme for AIB's board of directors in terms of comprehensively dealing with its overcharging problems and the individuals still working at the bank who were involved in tax evasion. So far, he is happy with the results, which have included the docking of some bonuses and the departure of one individual.

"The bank has been working very hard on its processes and systems. We expect it to continue its disciplinary procedures. This must be transparent within the institution. The files must be kept. There can't be any obfuscation of this issue at the end of the day, even up to letting a person go," O'Reilly says.

The regulator has also been working behind the scenes to ensure that the 19 individuals named in the High Court inspectors' report into overcharging and the facilitation of tax evasion at National Irish Bank, do not continue to work in the sector.

"Almost all of them have left the industry, with a couple still believed to be involved. We are still working on them. The Director of Corporate Enforcement is also working on them and we would be in contact with his office," he adds.

O'Reilly seems upset by some recent criticism in relation to Ifsra's handling of a number of issues related to a small number of re-insurance companies operating at Dublin's International Financial Services Centre (IFSC). In one case, regulators in Australia had alerted O'Reilly's office that a number of people working in the Dublin office of Cologne Re had been banned from working in Australia.

"There was an implication in the media that we were caught by surprise," O'Reilly says. "We knew about the issue well before it hit the papers. We were talking to regulators in Australia and the entity here. We had ensured these individuals were not in positions of power here. We are happy we dealt with it appropriately," he explains.

There were concerns that problems within this vibrant and profitable segment of the State's successful international financial services centre would tarnish its reputation with potentially damaging consequences. One media report referred to the IFSC as the "wild west", implying a lax regulatory environment. O'Reilly responded, using equally colourful language, saying he didn't immediately reach for his gun to shoot people down. He needed to know the facts.

The regulator's tendency to quietly tidy up some sensitive issues and to studiously avoid putting certain facts into the public domain can leave it open to criticism of inaction when details emerge in the media.

"There is a question of whether we should tell the papers everything. We are not in the business of telling stories for the sake of it. It can be in the public interest to disclose details and that may contribute to change in those institutions. But we have to keep our eye on the ball," he says.

O'Reilly, who is a career Central Banker, has been involved with regulation of the sector since 1988.

"Generally, I prefer to be less excited," he says. "I would love to work myself out of a job. If customers were fully informed and believed they were being dealt with honestly, I will have done my job and can ride off into the sunset."

Factfile

Name: Liam O'Reilly

Age: 58

Family: Married to Alice. They have one son and one daughter.

Background: From Newbridge, Co Kildare, he did a B Comm at UCD, has a MSc in economics and statistics and a PhD in econometrics from Trinity College Dublin.

Hobbies: Walking and golf.

Career: He began his career at Dublin Corporation and joined the Central Bank of Ireland in 1967. In 1998, he was made responsible for all its financial supervision functions.

He was appointed as chief executive of the Irish Financial Services Regulatory Authority when it was established on an interim basis in November 2002. The body formally came into existence in May 2003.

Why he is in the news: The financial regulator celebrates its second birthday this week.