GE Money
Toxic bank could prove lethal to 5,000 jobs union warns
Issued : 6 August 2009
Irish Independent
The Government has been warned that its new toxic bank could prove lethal to up to 5,000 jobs.
A union said thousands of jobs will be at risk due to consolidations in the financial sector after the National Asset Management Agency (NAMA) transfers toxic assets from the institutions' balance sheets.
The Irish Bank Officials Association urged the Government to clarify what the likely impact of the so-called bad bank's creation would be on the union's 23,000 members in the financial sector.
It urged Minister for Finance Brian Lenihan to convene a Commission on Banking to find consensus on its future direction.
"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," said IBOA General Secretary Larry Broderick.
Mergers
"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."
He said some 'reconfiguration' of the sector may be needed but he was deeply concerned that consolidation could be 'used as a pretext' by managers for 'an opportunistic cost-cutting agenda'.
Mr Broderick said 750 jobs had already been 'sacrificed' at the Ulster Bank Group due to the 'reckless' policies of senior managers in its parent company.
"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," he warned.
The new agency will begin acquiring 10,000 loans worth €90bn in October and will finish this work by the middle of next year. It can transfer, assign and sell property that was secured by the loans and borrow money to fund developments.
Anne-Marie Walsh Industry Correspondent
