The document runs to just 17 pages. But the content within it is devastating, anger-inducing, but, sadly, not all that surprising.

On Thursday, the Central Bank published the summary of its enforcement action into AIB (and its EBS unit) arising from the tracker mortgage scandal.

The headline was the imposition of a record €96.7 million by the Central Bank for the roles of both entities in the tracker mortgage scandal.

The bank, majority-owned by the state, quickly issued a statement of contrition, explaining how it “profoundly regrets” its failures, while the group’s chief executive Colin Hunt described the issue as “a very large stain on the reputation of the bank”.

No doubt Hunt and the AIB top brass hoped it would be a one-day controversy and that attention would move on to the next scandal. After all, is anyone really surprised anymore that a bank sought to fleece its customers?

But having read the document on a number of occasions, I think it is important not to move on just yet, because the scandal – and the response of the bank and policymakers to that scandal – is worthy of further interrogation.

After all, while the AIB is keen to paint this as a legacy issue, the regulator fined the bank for failings up until March 2022, just three months ago.

In my column last week, I went through the key findings of the investigation, highlighting how it painted a picture of belligerent arrogance within the bank over a sustained period. AIB may have ultimately admitted to wrongdoing, something that ensured it received a €30 million reduction in its fine. But it was far from upfront with the regulator over the course of the multi-year investigation.

Moving beyond AIB, however, four issues are worthy of attention.

1. The lack of individual accountability
The institution has been fined, but there has been no sanction against the individuals within the institution who orchestrated the disgraceful treatment of customers, and then sought to minimise the damage through a series of shoddy decisions.

Under the current rules, we have what is known as the “participation link”. Before the Central Bank can turn its attention to individuals, it must first investigate the firm (this was a point of interest after the Davy bond scandal.)

However, individual accountability has been on the cards for some time. Back in 2019, for example, Paschal Donohoe gave a speech about the culture within financial services as he explained how the new Senior Executive Accountability Regime (SEAR) will hold senior bankers to account.

The new SEAR regime is to be incorporated into the Central Bank (Individual Accountability Framework) Bill. While SEAR was targeted at senior C-suite management in banks and financial institutions, the new bill goes further and will impose standards on all those in consumer-facing roles.

The word in government circles is that the legislation will go to cabinet in the coming weeks. However, progress on the new regime has been extremely slow. Some of the delay is down to Covid-19, with the pandemic exhausting an enormous amount of bandwidth within the Department of Finance.

However, there has also been a significant level of toing and froing between the department and the Central Bank over the legislation. I’m told the regulator has been looking for more resources to manage the new regime and has raised a series of questions about elements of the proposed legislation.

Either way, the new regime cannot come soon enough. Individual accountability matters.

2. Removing banker pay restrictions is not going to happen
The industry has been lobbying hard to get a relaxation on the thorny issue of salaries and bonuses in Irish banks, highlighting how it has led to a brain drain.

Indeed, a government-commissioned report in 2018 by Korn Ferry on the topic recommended removing the restrictions. However, the government has never even published that report, never mind implemented its recommendations.

The tracker fine against AIB, and the likelihood of a further fine against Bank of Ireland, will give the government further cover to avoid making any changes. The banking industry knows that if the pay levels are to change, it has to happen before the next election, with the likelihood of Sinn Féin in government. I have written before about what needs to be done in relation to caps. However, I don’t expect anything to happen any time soon.

3. The role of the regulator
Yes, the Central Bank has imposed a hefty fine against AIB and made a number of hard-hitting statements. However, the Central Bank did not launch its own investigation until 2015, years after the scale of the problem was known. Many of the banks had in fact set up their own internal remediation schemes before the Central Bank triggered a formal investigation.

Instead, it let customers plough their own furrow with the Financial Services and Pensions Ombudsman. The regulator should have intervened much earlier, and it should have called out the banks much quicker on the issue. 

4.  A culture shift?
This was a topic that I put to Derville Rowland, Director General Financial Conduct at the Central Bank, when I asked her last week if she had seen any change in the culture within AIB. “They tell us it has changed,” she replied.

I am not convinced. The lenders may talk about cultural change, but we have not seen it in practice – from the constant jostling for higher pay to the treatment of non-performing loans to the chronically poor customer service.

Indeed, the Central Bank warned three years ago against the “return to hubris” within the industry, highlighting that it has had to push too many retail banks too hard over too long to actually put customers first.

Why is this? I have long argued that it is because the sector views itself differently, because it was treated differently. By bailing out the banks in the past, the banks were set apart, told time and time again that they were too big to fail, and were simply too important to the wider economy.

John Looby has written about this mindset also:

“Banks are different and are treated differently. In the absence of meaningful change, this is not a cyclical and temporary issue; it’s a structural and permanent one.”

It all gives senior bankers a sense of impunity and removes the need for real, meaningful change. As the tracker scandal and the disgraceful treatment of Belfry Fund investors highlights, little has fundamentally changed.


The tracker scandal was not the only legacy issue to re-emerge last week. On Wednesday, the High Court was notified that Quinn Insurance reached a settlement deal with PwC over its auditing of the collapsed insurer. The agreement brings to an end a marathon lawsuit sparked by the demise of the insolvent insurer in 2010 with a €1.1 billion black hole in its finances.

The administrators of Quinn had taken an €800 million-plus negligence claim against PwC, claiming that the auditors failed to raise red flags about insolvency risks on the insurer’s financial statements between 2005 and 2008. The accountancy firm rejected any wrongdoing,

As part of the settlement, the firm had not conceded any liability but has signed a cheque running to tens of millions of euro. Francesca and I wrote last week about why the deal made sense for both sides, and how it came about.

An anonymous message board for tech workers reveals salaries, disdain for Irish taxes and thoughts on life in Dublin. Popular in Silicon Valley, Blind has now found an eager new audience in Ireland. Rosanna unpicked the details and found out what people were saying about Dublin. The headline sums it up best: “Generally safe, shit public healthcare, broken housing market.”

Behind a leafy façade in Georgian Dublin, a small team has been instrumental in directing global institutional investors towards Irish property development. Based on hundreds of documents, site visits and insider information, Thomas last week told the story of Ardstone. Part one of his investigation focused on its office and commercial property deals. In part two, he revealed how it has discreetly funded every possible type of home in the country.

Finally, last May, we published a piece by journalist Laura Roddy explaining the controversy surrounding a proposed new cheese factory in Kilkenny. Last week, she became the first ever recipient of the Climate Justice Reporting Award at the Justice Media Awards for this work – on the very day Glanbia Co-op and its Dutch partner were turning the sod on the new factory, with the underlying environmental and legal issues still in play. You can read the award-winning article here.