A Crisis of Ethics: Moral Hazard and Banking Regulation in Ireland

Main author: Tobin, Damian
Format: Monographs and Working Papers           
Online access: Click here to view record


Summary: This think piece argues that before Ireland's banking crisis, the regulatory emphasis was focused on the integrity of the banking system as a whole and the behaviour of individual banks was largely ignored. Regulators placed their faith in market data and believed assurances by banks that they were well capitalised. The banks adopted an approach that placed sustaining markets over professional ethics. The opinion piece shows that corporate governance improvements wee often cosmetic and banks themselves knew about the impending crisis far earlier than they admitted to government.