On 21 September, the Government established a Statutory Commission of Investigation into the banking sector in Ireland, with the passing of the Commission of Investigation (Banking Sector) Order 2010.
Mr Peter Nyberg has been formally appointed as sole member of the Commission of Investigation into the banking sector in Ireland. Mr. Nyberg is the former Director General for Financial Services at the Finnish Ministry of Finance. His report must be completed by March 2011.
The signed Order has not yet been published, however a draft Order has been released by the Department of Finance. It provides that the report will investigate the period from 1 January 2003 to 15 January 2009, in respect of:
(i) The main causes of the failure by the institutions which are now covered by the Credit Institutions (Financial Support) Scheme 2008 (the Bank Guarantee Scheme), to implement and adhere to appropriate standards and controls in the context of corporate governance and prudent risk management policy and procedures;
(ii) The adoption of business models and strategies by the boards of Anglo Irish Corporation and Irish Nationwide Building Society and the implementation by senior management of those institutions, of business and lending practices resulting in financial distress.
The report is also expected to address whether the external auditors of the relevant institutions communicated in their audit reports or in other communications to the institutions concerned, the issues at (i) and (ii) above, during that relevant time period.
Causes of the failures of the Central Bank and Financial Services Authority in its performance of statutory roles and responsibilities between 1 January 2003 and 28 September 2008 are likely to be investigated, in particular in relation to the supervision and oversight of corporate governance and risk management policies and practices in respect of the institutions which are now covered by the Bank Guarantee Scheme. Advices or directions given by the Department of Finance to the CBFSA in respect of the CBFSA's supervisory role will be included in this assessment.