IRISH NATIONWIDE Building Society is of systemic importance, but there is no question of a Government bailout until all options have been assessed, Taoiseach Brian Cowen said yesterday.
His comments came as Green Party chairman Dan Boyle said Irish Nationwide could not expect any special favours just because it had had a bad year, while Labour Party finance spokeswoman Joan Burton castigated the Government for failing to take action in relation to the troubled building society years ago.
Responding to figures showing that Irish Nationwide reported after-tax losses of €243 million in 2008, Mr Cowen refused to be drawn into comparisons between Irish Nationwide and Anglo Irish Bank, and a possible Government bailout of the building society.
Mr Cowen pointed out that the EU allows State support for financial institutions of “systemic importance” and Irish Nationwide was one such institution.
But he added that he would not speculate about a possible bailout “until such time as the Minister for Finance has had an opportunity to come and advise Government as to what the best way forward is”.
But Mr Boyle said Irish Nationwide had to take responsibility for their situation. “Government policy is to put in place a programme to allow financial institutions to operate to allow the economy to recover. I wouldn’t be in favour of particular rescue packages, particularly when there is a degree of responsibility with bad management for the situation that some of the institutions find themselves in.”
Mr Boyle said he found yesterday’s performance report by Irish Nationwide “especially rich” given that it decided to award its chief executive a €1 million bonus.
Ms Burton said the results once again highlighted “the absolute failure of the Government to regulate” the company.
“This is a building society which would have raised alarm bells in any properly regulated regime. An alert government would have taken action years ago,” Ms Burton said.
“Having included Nationwide under the bank guarantee umbrella, the Minister for Finance has since parked it without seeming to know what to do with it.”
