Loan rules 'lacked proper checks'
Lending practices at now state-owned Anglo Irish Bank and Irish Nationwide Building Society (INBS) lacked proper checks and balances, the Nyberg report has found.
Loan policies were treated as guidelines rather than strict rules at Anglo, while structures managing the bank's exposure to risk were below par.
Lenders at the scandal-hit finance house, which is costing taxpayers 30 billion euro, commonly ignored their own rules.
Irish Nationwide - bailed out to the tune of 5.4 billion euro - had a sub-standard lending wing with files often badly maintained and deals not reviewed.
"Contrary to public perception at the time, lending at Anglo and INBS had proceeded with insufficient checks and balances during the period," the report stated.
Most Anglo board members did not have sufficient experience or specialist knowledge to fully-recognise the risks, the report said.
"The board therefore lacked an internal, robust source of risk assessment and external feedback."
Internal auditors were also unable to challenge credit decisions, but instead were limited to checking the terms and conditions were being adhered to when loans were being sanctioned.
The report found internal auditors in Irish Nationwide lacked knowledge in key areas such as IT, Treasury and commercial lending.
It also said the Financial Regulator was aware of the problems in both banks but hesitated over whether to come down hard on the lenders after problems were identified.