THE Central Bank is seeking new legislative powers to make individuals in banks responsible for their decisions.
It comes after a report found some banks continue to operate with a crisis-era mindset.
The onset of the financial collapse a decade ago was blamed for banks mistreating their customers, including wrongly taking good-value tracker mortgages off them.
But despite lenders recovering from the crash some banks still have “command-and-control” leadership styles, a Central Bank review found.
The regulator wants new laws so that individuals in banks can be held personally responsible for their decisions.
The report was ordered by the Finance Minister in December in the wake of the tracker mortgage rip-off.
Regarded as one of the largest financial scandals in the history of the State, the tracker debacle saw almost 40,000 mortgage holders either denied a tracker rate or put on the wrong margin.
Putting right the tracker mess is set to cost the banks around €1bn.
The new report focuses on the leadership and culture of AIB, Bank of Ireland, Ulster Bank, Permanent TSB and KBC Bank and examines how customers should be prioritised. But individual banks are not named in the report.
No individuals have been held to account for the tracker swindle.
In the report on the culture of the banks, the regulator says some banks still have a long way to go when it comes to acting in a more consumer friendly way.
The ‘Behaviour and Culture of the Irish Retail Banks’ report found some banking executive committees display “firefighting behaviour” ten years after the banking collapse.
There is a focus on urgent and short-term issues.
“This may be a remnant of a crisis-era mindset which persists because of the necessity to solve a multitude of legacy and regulatory issues,” the Central Bank said.
There is a need to empower senior staff rather than have all decisions going through chief executives.
The Central Bank wants the law changed to give it powers to make individuals in banks accountable for their actions.
Senior managers would have to set out where responsibility and decision-making lies in their bank.
Bank bosses would have to adhere to new “conduct standards” setting out what was expected of them by the regulator.
Central Bank director general financial conduct Derville Rowland said culture is set from the top down.
“It is a matter for boards and senior management, in the first instance, to set an effective culture that places the best interests of their customers first. Banks still have a distance to go to live up to their slogans of putting customers first.”