The Central Bank has announced that Matthew Elderfield, the deputy governor of the CBI and the Financial Regulator has resigned his €340,000 a year post at the bank, and will be returning to the UK in six months “to pursue other interests”.
Central Bank governor Patrick Honohan says “Although it was always evident to me that we were very likely to have Matthew with us for only a few years, it is sad that this period is now drawing to a close.”
Matthew joined the CBI in January 2010, four months after Professor Honohan had been appointed. Governor Honohan pays tribute to him in general terms this morning. Though more efficient and competent than his predecessors, the view of him on here was never great and circulating glowering photos was not a substitute for the serious remedial work needed in Ireland’s banking sector. Matthew’s stress testing of the banks in 2010 were comical, and it was not until 2011 when an independent stress testing by BlackRock, Barclays Capital and Boston Consulting was carried out under the auspices of the bailout Troika that the markets had any real confidence in what lurked beneath the balance sheets of Ireland’s covered banks. Whilst Matthew did champion new rules to ensure senior roles at Irish banks were occupied by those untainted by the crisis, we still have the gung-ho Richie Boucher at the helm in Bank of Ireland and we have been reminded in recent days how Ritchie supported Sean Dunne and the ultimately disastrous development in Ballsbridge.
The statement this morning says “Mr Elderfield has advised the Commission of the Central Bank that he has waived his €100,000 bonus entitlement at the end of his contract of employment.” And indeed there has been a running theme on here about Matthew and his €340,000 salary being 40% higher than his boss’s Governor Honohan who is now down to €230,000.
There will hopefully be some insider information on here later today regarding the resignation. We can only pray that Matthew’s replacement is not some career servant of the ilk that contributed to the banking collapse in 2008.
UPDATE: 9th April, 2013. Crikey, there does seem to be some worry that Matthew’s resignation betokens some instability or unrevealed bad news in the Irish banking system. Minister for Finance Michael Noonan has issued a statement to pour further oil on what could become troubled waters and he says Matthew ” is leaving at a time when normality is returning to the financial system and the Central Bank is suitably prepared to deal with his departure in six months time” So, nothing to see here, and especially no instability or anything that might give you cause to worry about any aspect of the Irish banking sector.
NAMA Wine Lake 
What about Quinn Insurance
What about Newbridge Credit Union.
@Michael, what about them? Both had colossal problems which pre-dated Matthew’s appointment in January 2010.
And thinking about it, we can be thankful to Matthew for at least knowing the scale of the mortgage arrears problem in Irish banks. The reason the quarterly statistics only go back to Q4,2009 is because prior to Matthew arriving, no-one collated these statistics.
@Macholz, in fact Matthew Elderfield is probably the ultimate outsider. He was appointed to a €340-400k a year role at a time when the scale of the problems in our banks and economy were seemingly not recognised. He is British and immediately previously oversaw the banking sector in Bermuda. He is not a career civil servant. Mind you, if Governor Honohan always knew he was going to last a short while, you might ask why he appointed him.
Reblogged this on Machholz's Blog and commented:
Another insider leaving the sinking ship
see;http://en.wikipedia.org/wiki/Matthew_Elderfield
“in fact Matthew Elderfield is probably the ultimate outsider.”
Yes, let’s hope they appoint another outsider, even if the salary is higher than Honohan’s.
Its now nearly 5 years since both Chief Executives and Chairmen of AIB and BOI respectively mislead Lenihan on Sept 29 2008.
Yet, those four senior banking figures and the former financial regulator Patrick Neary still haven’t been formally investigated or called to publically explain themselves.
Why is this so? How long must we wait for accountability?
What’s the Irish word for accountability?
@OMF : Cronyism is the literal translation.
@nwl
Something doesn’t stack up here.
Over the past number of years Elderfield has been banging the moral hazard table as the reason why it was next to impossible to deal with the mortgage crisis because one deal done with your neighbour would have opened the floodgates etc etc.
Unfortunately the scale of the problem has overtaken Elderfields initial thoughts on the problem and he’s now left with the possibility that in order to fix it the banks will in all probability require yet more capital. Saving that simply amending the rules to allow banks trade on lower core tier 1 ratios – either solution its a severe blow to Elderfield because this will be the 4th visit to the taxpayer to fix the capital hole were he to go that route. In allowing a lower ratio regime he’ll be doing a U turn on the stability of the Irish banks mantra.
Net net its bad news for Matt and he knows it and he’s bailing out before the real shit hits the fan. Wise choice.
To quote Buffett (again) – “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact”
Touché Mr Buffett right again, as the banks business model as practised in Ireland from 2002 to 2008 have managed to kill off another poor soul.
“and will step back from any supervisory functions with immediate effect.”
Is he essentially on gardening leave for the next six months?
180K !!! – that’s one expensive gardener
@Karl, it;s not just the most expensive lawyers in Europe, but we also have the best paid gardeners in the world and Matthew is just the latest in a longish line which includes Michael Torpey who left DoF for Bank of Ireland at the start of this year and presumably the others in DoF who melted away into the private sector.
Or it could suggest that there is some more skeletons in the closet that he does not want his reputation tarnished with. Keep scratching the surface Namawinelake and I’m sure something bad is around the corner. Maybe to revealed after a lengthening of the loan repayment schedule.
One has to ask if he has a subscription to the Government/RTE ‘turned the corner’ message then why not stick around and get the credit.
Unless you think there’s a chance your CV could read: ‘ Man who continously underestimated the scale of problem’.
Either way, I hope his successor fixes L2V ratios and salary2mortgage multiples. There would be nothing more depressing than seeing another property bubble in our life time.
Is this an irresponsible suggestion by David McWilliams?
http://www.broadsheet.ie/2013/04/10/this-is-how-rumours-start-4/
@Sparks, David has his cojones back. The only thing is that he underestimates the losses…. and yes, the Cyprus solution was without question the new template. If you have any savings, get them out of the eurozone.