The following is an extract from the editorial in the Sunday 11 Novermber edition of The Irish Mail on Sunday
We pay the piper: we can call the tune
September 2008: Anglo Irish Bank, having borrowed billions it could not repay, went bust. Everyong there lost their jobs. The carcass was later bought from creditors by a US venture capitalist fund for a nominal fee. It re-employed a handful of staff on one third wages to eke what they could out of Anglo’s loan book.
After Anglo collapsed, so too did Bank of Ireland and AIB. They too ceased to exist. Their staff lost their jobs too. The Government which had guaranteed people’s deposits, used other banks and post offices to dole out cash. Bank of America bought the branches and cash machines that used to belong to BoI, HSBC snapped up AIB’s buildings and ATMs. Around half of the old workers were invited to apply for similar work under the new companies. Bank of America (Ireland) and HSBC Ireland – but for half their old salaries.
All the old board members of both banks were fired. Their pensions were slashed because the pension pot was suddenly hugely under-funded. Many were sued by bondholders, who also demanded criminal and parliamentary inquiries into what went wrong. The guilty men were punished, Irish banks were cleaned up – and our national recovery began.
…….but sadly, we know that the above is just a fairytale. The bust banks were propped up using our money. The pension funds of former bosses were topped up – using our money. And the salaries of bank workers stayed just as artificially high as they were at the height of the boom – all thanks to our money.
And still it goes on. The four banks employ over 1,700 on salaries over €100,000, of these 200 get more than €200,000 and 65 receive over €300,000 while their new chief risk officer will receive over €500,000. All this to employees of a bust bank bailed out by taxpayers.4
Yet our Minister for Finance, Michael Noonan pays the piper on our behalf but refuses to call the tune. Astonishingly he buys into the laughable notion that we have to pay huge salaries to attract people capable of winding down a failed investment firm or of running two banks to serve just four million people.
Noonan and his cohorts are trapped into an ideological mindset controlled by these smarter, more confident and tougher bankers they are, amazingly, supposed to oversee.