The Financial Regulator “utterly failed” to protect the Irish consumer during the banking crisis, according to a consumer panel tasked with reviewing the authority’s performance.
In its 2009 annual report, the Financial Services Consultative Consumer Panel roundly criticised the regulator for failing in its prudential supervision role and letting down consumers.
The panel of 20 members, drawn from banking, academic and media fields, will soon be disbanded as a result of an impending shake-up of the regulatory system, which will see the Financial Regulator merge with the Central Bank to create the Central Bank of Ireland Commission.
The panel recommended that consumers should be represented on the board of the new body. It also called for the introduction of an authorisation system for individual financial products, and the reform of existing debt collection laws.
The Financial Regulator was commended for its work in informing and educating consumers - a role which transferred to the National Consumer Agency in March - but this was one of few positives in today’s damning report.
Most consumers have lost substantial sums of money as a result of the “inadequate functioning” of regulatory structures, the report said. “Unfortunately those consumers with mortgages, pensions and shares... will pay an ongoing price in the coming years for the failure of the Irish regulatory system,” it continued.
In its assessment of the regulator’s 2008/2009 performance, the panel found that too much trust had been placed in the willingness of regulated banks to “do the right thing”. Furthermore, the Regulator’s board was harshly criticised for failing to take responsibility for their stewardship of the organisation.
The panel also felt that the regulator had not done enough in to protect “hard-pressed” consumers from institutions passing on higher mortgage rates in an effort to rebuild their balance sheets.