So, you’re an employee of Irish Bank Resolution Corporation, or at least you were until two weeks ago when the Government appointed a Special Liquidator to that bank.
Now, you’re on a three-month contract, and you just might have the chance to join NAMA in August 2013, when the Agency will pick up any loans remaining unsold over the next six months. The betting on here is that at least 300 of the 1,000 IBRC staff will eventually be made redundant and they can look forward to statutory redundancy at the rate of two weeks for each completed year of service plus an additional week, all capped at €600 per week.
Meanwhile, should you be ultimately employed by NAMA, remember all NAMA staff earning over €200,000 have waived 15% of their salaries, whilst 30 IBRC staff, when presented with the same request, gave the finger to finance minister, Michael Noonan. So, even if you do get a job at NAMA, you may face a pay cut, and remember NAMA pays practically no bonuses at present.
So, if you are now working for IBRC, you probably aren’t the most motivated or committed worker, and who can blame you for having an eye on your future after the three month contract expires.
There are credible reports being received on here now that certain former IBRC employees might be displaying some personal initiative in offering their skills and knowledge to potential buyers of IBRC assets. There is nothing untoward about some of these contacts – if you’re facing a high probability of redundancy, then you should be looking to safeguard your income and career, so of course you will be looking for work, and talking to potential employers.
But, where there are grounds for concern, is in the possibility that privileged inside knowledge might be offered to potential purchasers by desperate employees facing an uncertain future from May 2013.
And there is no evidence that this concern is being addressed by the Special Liquidator or the Department of Finance.
And why would they be concerned? Remember that Ireland is a country where we take it on trust that senior civil servants and state employees will not use and abuse privileged information gleaned during their time at the heart of governance and Government, to the unfair advantage of their new employer. At least certain NTMA staff who have recently left senior positions at the Department of Finance are covered by the Official Secrets Act and the NTMA Act, both of which supposedly prevent the use of privileged information in new roles.
But, IBRC staff just had standard private sector contracts of employment, and are not covered by the Official Secrets Act or NTMA Act. And they have maximum three month contracts.
So, what this Government has done, is to create a situation where it has a large group of de-motivated, insecure staff involved in the sale of €16bn of state assets – loans mostly – to companies which may be their best hope of future employment. And during the Wild West next six months, there will be millions and maybe hundreds of millions made and lost.
With all respect to the staff at IBRC, what the Government has done is created a fertile breeding ground for rogue employees to sell their privileged inside knowledge in a market environment where €10s of millions are at stake (easily) and in some instances, there may be €100s of millions.
I wonder where this risk featured in the six months of planning which preceded the decision to liquidate IBRC on 6th February 2013.
NAMA Wine Lake 
Good Post.
But normal practice is for a liquidator to sell the assets in one full lot, if he can.
Why does the liquidator have to wait six months in order to sell ‘the remaining’ assets to NAMA. Why is this necessary?
Why not do the deal with NAMA, and get it over with, thereby removing some potential conflicts . Why allow more cherry picking by the private sector, before the final junk is transferred to NAMA. Why the wait?
@Joseph, a good question and when Pearse Doherty asked the question last week, he got another nonsense response.
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement by the National Asset Management Agency on 7 February 2013, if he will provide an assessment of the merit in directing NAMA to acquire all legacy loans at the Irish Bank Resolution Corporation today..
Minister for Finance, Michael Noonan : The recent enactment of the IBRC Act 2013 together with the replacement of the Promissory Notes with a portfolio of Irish Government Bonds puts in place a permanent, finite and viable solution in terms of a significant portion of the shortfall in banking financing that has emerged through the Irish financial crisis. Following an independent valuation process, the Special Liquidators will sell the assets of IBRC (which are subject to a floating charge which secures IBRC debt to the Central Bank which will be sold to NAMA) to third parties at or above their independent valuation and failing that the Special Liquidators will sell the assets to NAMA at their valuation price.
The measure has the further advantage of achieving efficiencies by housing all legacy assets in one vehicle. Government took the view that it made little sense at this point to retain two State organisations performing broadly similar functions and that, in the interests of costs and efficiency, it was appropriate for NAMA to purchase the assets of IBRC
Since the cop in charge of the Anglo investigation jumped horse and joined Bank Of Ireland mid race as it were, nothing surprises me at all in high finance. Its seems a culture of self preservation above all else is an essential part of the c.v. Moral/social/ethical/care concerns that play part of teaching, community work, frontline medical care and indeed all healthy human social interaction seem to have been sucked out of this sector.
Though perhaps some whistle blowers – rather than the pocket fillers described above – might yet restore some faith to the ordinary critical observers oscillating about the breadline.
The correct model for most people in the banking sector is not that of a well adjusted, well meaning, or reasonable human being. The correct model for a banker is a Saturday Morning Cartoon Villain.
We never ask why Gargamel or Bluto or Skeletor commit the deeds they do. We understand immediately what motivates their schemes and plots — and why the same are often riddled with ineptitude and incompetence. Most importantly of all, we innately understand that appeals to logic, reason, and morality are all useless in the face of the Villain’s howls of laughter at the damage he has caused.
Bankers are not the Master’s of the Universe; they are Skeltors. One dimensional cartoon villains with no morals, no restraint, and who lust not only for wealth and power, but also for the simple thrill of committing crimes and defrauding others.
Apply the model of the Cartoon Villain to bankers, and their every deed becomes understandable and predictable. Attempts to consider them as even two dimensional will only lead you astray. Therefore, we can predict exactly how many of these ex-IBRC staff are likely to behave. As NWL has outlined above, they will attempt to skirt around (the lack of ) restrictions in their contracts to personally enrich themselves at public expense.
Such attempts are inevitable. What matters is how we deal with them. One thing is certain: if we should let these villains escape, they will be back to trouble us next week.
John Kay recently wrote an interesting piece on fiduciary standards which I think is relevant:
http://www.ft.com/cms/s/0/b692191e-6ec8-11e2-9ded-00144feab49a.html
At the end of the day, the bankers should be professional – what is being described here is a clear conflict of interest from which the banker can profit. There may be no rules against it (though there probably are) but their moral compass should tell them what is right or wrong.
OMF – you’re brush is too broad in your generalisations of “most bankers” in my opinion; there are tens of thousand of people employed in banks in this country, the vast majority of these continue to work hard, facing daily public frustrations, for something they had no real responsibility for. The problem was, I think it is accepted, in the minority, those being in very senior positions, exacerbated/facilitated by the regulatory framework and people in power in the Government and the Department at the time.
Similarly your portrayal of the ex-IBRC staff is overly simplistic. If the rank-and-file are such cartoon villians why were these staff not off enriching themselves for the past few years with this precious client information, instead of managing the orderly wind-down of their business as mandated by the government, as it appears they were successfully doing. Those ex-IBRC staff had been more successful year-on-year at recovering money’s for the state than the other state recovery agency, NAMA – a point that is spun and glossed over too often in the media.