Irish Nationwide has described an e-mail circulated by the son of the building society's boss Michael Fingleton seeking new deposits as “inappropriate and regrettable in the circumstances”.
The e-mail from Michael Fingleton jnr was sent to at least one leading global bank stating that as a result of the protection of the Government's new bank guarantee plan, Irish Nationwide “represented the safest place to deposit money in Europe . . ."
Mr Fingleton jnr stated in his e-mail that the six-month and one-year fixed-rate bonds offered by Irish Nationwide were now very attractive. “Money in these accounts are guaranteed regardless of the size of deposit and represent the best value in the UK market.”
This e-mail from Mr Fingleton jnr, who works in the building society's Wigmore Street office in London, runs counter to a statement by the Minister for Finance Brian Lenihan to the Dáil on Wednesday night that he was determined to ensure companies protected by the guarantee did not engage in anti-competitive practices.
“I will have no tolerance for any financial institution which seeks to exploit competitive advantage from this guarantee”, Mr Lenihan said on Wednesday.
Mr Lenihan has referred the e-mail to the Financial Regulator.
Labour Party finance spokeswoman Joan Burton said the Government must indicate what action it will take against banks found to be "abusing" the guarantee scheme.
"I am sure that officials of other institutions will not be so imprudent as to put their comments in writing, but what possible steps can the government take to prevent this selling pitch being made verbally?" she asked.
"This e-mail raises serious questions about the value of this commitment. The government must make it clear that banks found to be abusing the scheme will be subject to sanction and, in the case of systematic abuses, may be removed from the scheme altogether."
Full text of the e-mail from Mr Fingleton jnr:
As you may be aware on Tuesday 30th September the Irish Government put in place a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and Interbank), covered bonds, senior debt and subordinated debt (lower tier II) with Irish Banks.
As Irish Nationwide qualifies under this scheme we now represent the safest place to deposit money in
Europe with a AAA guarantee from a country with the lowest national debt to GDP ratio of any AAA country.
Irish Nationwide are offering the following GBP£ products for savers:
Six month 6.75% fixed rate bond (Irish Government Guarantee for any amount)
One year 7.10% fixed rate bond (Irish Government Guarantee for any amount)
Money in these accounts are guaranteed regardless of the size of deposit and represent the best value in the UK market. I can provide application and opening forms by email if required.
Please be so kind as to pass on to friends, colleagues and clients as you see fit. Should you have any queries, please do not hesitate to contact me directly on ************ or ***** in the office.
I look forward to hearing from you in due course.
Kind Regards,
Michael Fingleton (Jnr)
Irish Nationwide Building
Society
122 Wigmore Street
London W1U 3RX
