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To: GraceZ who wrote (150761)	2/12/2002 3:03:08 AM
From: maceng2	Read Replies (1) \| Respond to of 436258

Allied Irish Banks recognised that its financial controls needed tightening almost a year before it suffered a $750m loss at the hands of alleged rogue currency trader John Rusnak. news.ft.com [I finding this story an amazing comment itself. The senior management really think they can throw up their hands and say "C'est La Vie, $750 mil down the tubes. We could do nothing about it". The shareholders should fire every one of them. The message would then be to Bankers...."If you lose 750 mil, there is going to be some trouble"..... pb] The bank only implemented the plans to strengthen control over its US treasury operations, where Mr Rusnak worked, after the huge alleged fraud came to light last week. In an interview with the Financial Times, Michael Buckley, chief executive, admitted that the decision last week to centralise all treasury functions had already been on the agenda. "We are just accelerating something that has been in the plans over the last 12 months or so," he said. Mr Buckley also said the bank had been in a position for six to eight weeks to move Allfirst's treasury on to a new technology platform with tighter risk controls. The admission is likely lead to regulators and investors questioning why controls over the US subsidiary, Allfirst, were not tightened earlier. So far no senior AIB executive has stepped down, but some shareholders have called for resignations. US lawyers have started preparations for a possible legal action after being contacted by unhappy shareholders. Maurice Crowley, chief financial officer of Allfirst, has insisted that Susan Keating, chief executive of Allfirst, and Frank Bramble, head of AIB's US division, are not planning to quit. Although Mr Rusnak's trading aroused suspicion as early as December, fraud was not suspected until shortly before the loss was discovered a week ago. Allfirst's traders reported to the senior local management, who then reported to executives in Dublin. But there was no line of management accountability from the Allfirst treasury to the head office, with the only link being automated collection of statistics. Mr Buckley said Dublin set risk standards and Allfirst's net currency exposures were fed into head office computers. There was further bad news for the bank when it emerged that the insurance policy that could cover its losses had a limit thought to be as low as $200m. AIB holds insurance designed to cover the costs of defending or settling class action lawsuits. According to sources in the London insurance market, the policy would also protect AIB from theft carried out by dishonest employees. However, it is understood to be capped at $200m, and it is not yet clear whether Mr Rusnak benefited from the alleged fraud. Additional reporting by Vincent Boland in Baltimore