Former BMA Chief’s Grim Assessment Chills Ireland
A speech on Monday [Nov 22] by former Bermuda Monetary Authority chief executive officer Matthew Elderfield sent a chill through Ireland, reminding the increasingly debt-ridden country a regulatory system which allowed the “Celtic Tiger’s” economy to artificially boom based on inflated valuations and false hopes in recent years represented a catastrophic failure of regulation and corporate governance.
Matthew Elderfield, the BMA’s CEO from 2007 to 2009, took up his position as the Bank of Ireland’s Financial Regulator in January with a mandate to rebuild the office’s function, restore its reputation, oversee the recapitalisation of Irish banks, match Ireland’s regulatory changes with the raft of measures coming internationally and strike a measured balance in his approach to maintain a competitive position for the Irish financial services sector at a global level. Mr Elderfield said he intended to pursue a policy of ‘”assertive’ regulation”, backed up by the credible threat of enforcement.
“Mr Elderfield must be wondering why he gave up his banking regulator’s role in Bermuda to head to Dublin last autumn,” the “Wall Street Journal” reported this week on his efforts to stabilise the country’s ever worsening economy amid a growing financial and political crisis. “But that a new regulator was badly required by then had already become glaringly obvious, as the banks were threatened by their exposure to the country’s property bubble. ‘The Irish people are now paying a heavy price for the failures at the heart of banking’, said Mr Elderfield.”
The Bermuda Monetary Authority, which among other things regulates the island’s banking and insurance industries, announced that Mr. Elderfield had been appointed as the organisation’s CEO in 2007. He “brings 20 years of experience in international financial services regulation to the Authority,” the BMA said at the time, “encompassing supervision, policy and risk management and high-level advocacy in the US and Europe.”
Mr. Elderfield officially took over the BMA reins from former CEO, Cheryl-Ann Lister, on July 16, 2007 although she remained with the organisation for a month-long handover period until August 17.
Mr. Elderfield had previously been Head of Department, Major Retail Groups Division within the Financial Services Authority (FSA) — the UK financial services regulator — beginning in December, 2004. In this position, he had been responsible for the supervision of eight banking groups including Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland. He was with the FSA for eight years, and, among other tasks represented the FSA on the Basel Accord Implementation Group, and Chairs the FSA’s Basel Model Approval Panel. The Basel Accords cover EU regulatory procedures for banks.
“We are delighted to welcome Matthew to the BMA team,” stated Chairman Alan Richardson at the time of Mr. Elderfield’s appointment. “His career has been highlighted with an impressive technical ability, as well as a progressive and outstanding record of achievement in all of the positions he has held.”
Mr. Elderfield responded that he was “looking forward to working with the BMA’s Board, staff and stakeholders to determine how the work of the Authority should develop in the changing international regulatory environment.”
