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Consumer watchdog fails to meet despite financial crisis

PAUL CULLEN, Consumer Affairs Correspondent

IRISH BANKS have lost 90 per cent of their value and the Financial Regulator has seen its chief executive retire early, yet the watchdog monitoring them has not met for more than five months, it has emerged.

The last meeting of the consumer consultative panel of the Financial Regulator was held on September 9th, 2008, the Department of Finance has confirmed. That committee’s term expired in mid-October and it took more than three months before Minister for Finance Brian Lenihan appointed a new panel last month.

The delay in appointing a new panel, and the failure to consult consumer interests during the financial crisis, has angered some members.

“It was noticeable during the crisis that industry had the ear of the Department of Finance and the regulator but consumers were nowhere to be seen,” one told The Irish Times.

He said many of the issues raised by the panel had “crystallised” in the current crisis. “We told them they had to prepare for a downturn, we criticised the speed at which they operated and we expressed opposition to a ‘tick box’ approach to fitness and probity in financial institutions.”

The regulator has so far failed to publish the latest report by the panel on its performance; in previous years, these have been highly critical of aspects of its operations.

The author of the report, panel member and finance lecturer John Maher, said he wished it had been published some time ago but he understood the regulator must first make a formal response. This could not happen until a new panel was appointed and had met.

Mr Lenihan has now appointed 11 members, from a possible 20, and says he will consider further appointments later. He has also increased the term of membership from two years to three.

Membership, which includes representatives of the Consumers’ Association of Ireland, St Vincent de Paul and Immigrant Council of Ireland, is broadly similar to the previous panel and consumer lawyer Raymond O’Rourke has been re-appointed as chairman.

A separate industry panel has also not met for more than five months. It also took more than three months to appoint 20 members to this panel, which will be chaired by David Went, chairman of The Irish Times Ltd and former chief executive of Irish Life and Permanent.

The statutory function of the consumer panel is to monitor the performance of the regulator and to provide the regulator with comments on the performance of the financial services industry.

Its first chairman, Brendan Burgess, resigned in 2007 after tensions arose with the regulator. The panel’s 2006 review criticised the slow response of the regulator to consumer issues, saying it “communicates with such caution that it gives the impression that if it can find a reason not to act, this will be the preferred outcome”.

It also complained that the panel, and by extension consumers generally, have no information on enforcement activity.

According to the Irish Times newspaper

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Merkel holds anti-crisis summit - Straits Times

BERLIN - GERMAN Chancellor Angela Merkel, under fire over her reaction to the financial crisis, called together business leaders, ministers and experts on Sunday to discuss ways of escaping the international recession.

‘No concrete measure was decided,’ Economy Minister Michael Glos said after the six-hour meeting finished.

The goal of the meeting had been to reflect on possible measures, he added, with the government aiming to decide on specific actions by the end of January.

Finance Minister Peer Steinbrueck said everything would be done to avoid job losses.

The time had come for ‘us to take joint responsibility, as the government cannot handle the economic situation alone’, Ms Merkel told a press conference before the meeting.

Ms Merkel has made defending German jobs a top priority but increasing numbers have been lost in Europe’s biggest economy in recent weeks.

The criticism of the government has particularly hurt as Ms Merkel’s Christian Democrats (CDU) prepare for a legislative election in 2009. The CDU is in a coalition with the Social Democrats (SPD).

German economic experts and officials have said her 31 billion euro (40 billion dollar) economic stimulus is not enough.

Other European Union members have also pressured for Merkel to spend more.

Quoting government sources, the weekly Wirtschaftswoche reported the government is preparing a second 30-billion-euro economic plan that will include investment and fiscal incentives.

The package is not expected to be announced until the end of January, giving Merkel time to prepare an anti-crisis strategy within the government, the weekly said.

Ms Merkel is to meet state and local government leaders this week.

Der Spiegel magazine said in its latest edition that the government now expects the economy to shrink by two per cent in 2009. The official government forecast is for a fall of up to one per cent. — AFP
From: Merkel holds anti-crisis summit - Straits Times