Will Ireland’s Controlling Bankers Roux the Day?
The already tarnished reputation of Ireland’s financial services sector was dealt a heavy blow when the recorded conversations of senior Irish banking figures came to light in late June 2013. The recorded conversations would spark outrage throughout Ireland and even intensified contempt for the banking system in other European countries. The graveness of Ireland’s struggling banking sector was truly realised when the country had to seek a bailout from the European Union in 2010. Only a few months have passed since the recorded conversations became public and the Central Bank of Ireland have now appointed a new financial regulator, Cryril Roux.
Cyril Roux has had a distinguished career working for huge companies such as Axa before joining the Autorité de Contrôle Prudentiel et de Résolution (French banking and insurance regulator). The appointment will no doubt improve the alliance between the French and the Irish especially in relation to future decisions made by the EU regarding financial policy and the banks.
Cyril Roux made this statement upon his appointment. “I’m honoured by this appointment and very aware that restoring the Irish economy to full health requires effective financial supervision. I’m looking forward to joining the Central Bank with that purpose in mind and to take up where Matthew Elderfield is leaving off.”
The challenges Cyril Roux faces
One potential area for concern is if Mr Roux decides to employ the policies which the French used in terms of regulation. The big banks in France are extremely powerful and the French regulators have so far failed to suppress this power. Instead, smaller institutions have been hit with fines which have stunted their growth, in contrast to Frances big banks that have yet to face fines severe enough to make them reconsider their course of action.
Members of the Irish public should be buoyed by the news that Cyril Roux will come into power as an impartial member whose lack of experience and contacts in Ireland may serve him well in regards to making equitable decisions. He is however, entering the fray at what can only be considered as a very tough time for the financial services sector and indeed the regulators. Ireland is in the midst of a mortgage crisis and the public have already voiced their discontent at the way it is being handled. Other important decisions which will need to be made quickly regard Ireland’s potential exit strategy from the EU bailout and whether the economy does in fact need more financial stimulus from public funds.
The Harvard educated Frenchman will command a salary of €310,000 and it could be argued he will be worth every penny if he begins to strip apart the collective power of the Irish banks and employ a regulation policy which stabilises the financial sector and protects members of the public.
If you want to read more about the state of the banking sector in Ireland and Europe then take a look at this article.