GE Money
Thousands of jobs could be at risk in wake of NAMA, says IBOA
Issued : 5 August 2009
IBOA The Finance Union is seeking clarification from the Government on the likely impact of the creation of the National Asset Management Agency (NAMA) on the jobs of the Union's 23,000 members in the financial services sector.
"We understand that, in and of itself, NAMA will not have a significant effect on employment in the sector since bank staff will continue to be involved in managing assets on NAMA's behalf. But, once the transfer of toxic assets from the financial institutions to NAMA gets under way, it opens up the possibility for a major consolidation of the sector through mergers, acquisitions or closures," said IBOA General Secretary, Larry Broderick.
"The Minister for Finance already has significant powers in this regard under the legislation which extended the State guarantee last September. The draft legislation on NAMA published last week confers additional powers on the Minister - which could greatly facilitate the consolidation process.
"We recognise that some reconfiguration of the financial services sector may be necessary after these toxic assets have been removed from the balance sheets of these institutions. However, IBOA is concerned that consolidation could be used as a pretext by senior managements to pursue an opportunistic cost-cutting agenda putting thousands of jobs at risk.
"750 jobs in the Ulster Bank Group are being sacrificed because of the reckless policies pursued by senior management in Ulster Bank's parent company, RBS. We are concerned that other institutions may be lining up to follow suit - either through further job cuts or through attacks on our members' terms and conditions," Mr. Broderick warned.
"Our members did not precipitate the culture of greed which is at the heart of the crisis. Indeed we have consistently warned against the harmful effects of performance-related pay and the excessive bonus culture which has prioritised short-term profit-taking at the expense of long-term stability. But ordinary bank staff could now be scapegoated by the same management philosophy which was behind the current crisis, unless the Government takes specific steps to prevent it.
"By virtue of its shareholding in three major financial institutions, the Government has considerable financial - as well as moral - authority. We urge the Minister for Finance to ensure that the banking sector operates in the longer-term public interest rather than continue the short-sighted approach which created the crisis. In particular, we would ask the Minister to move quickly to address the need to change the culture of banking and to ensure that the boards of financial institutions are recast in order to promote this change.
"IBOA intends to take up the Minister's invitation to contribute to the debate on NAMA by considering its potential consequences for the future of the individual banks, the financial sector as a whole and the wider economy. Indeed, we believe that the Minister should go further by convening a Commission on Banking - with representatives from all of the stake-holders in the sector, including shareholders, senior management, staff, customers, the relevant State agencies and political parties - to try to achieve a consensus on the future direction of the sector and its role within the economy."
The Union is to seek further discussions with senior representatives of the Department of Finance, NAMA, the Financial Regulator and the Central Bank on these issues - which will also be raised with the North's Minister for Finance.
"In the meantime IBOA will hold a series of consultation meetings with our members in the Republic of Ireland, Northern Ireland and Great Britain to be followed by a special meeting of our Executive Committee later this month. We also intend to engage in a further round of soundings with a range of interested parties on possible approaches to the banking crisis and especially the issue of employment protection," added Mr. Broderick.
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