AIB 'seeks help from rivals'

Allied Irish Banks (AIB) has approached other banks to ask for help on how to improve its financial controls, according to the Sunday Telegraph newspaper.

AIB stunned the financial community earlier this month when it discovered an alleged $750m (£517m) fraud at US subsidiary Allfirst which it blamed on the actions of currency trader John Rusnak.

The paper says the move is highly unusual and is likely to raise more questions about AIB's internal controls and risk management processes.

In a separate report, the Sunday Times says preliminary investigations into the matter have indicated that insiders at other banks may have helped Mr Rusnak.

Investigation

The FBI and AIB are both currently investigating the circumstances behind the $750m loss.

Mr Rusnak's lawyers have insisted that he did not steal money from the bank.

The Sunday Telegraph says that when banks discover that controls have been breached, it is normal for an external expert to be appointed to check internal systems.

The paper says industry observers consider AIB's approach to rival banks seems to indicate that it has little confidence in its ability to impose tighter controls and better risk management systems.

The Sunday Telegraph said AIB declined to comment on the story.

Not alone?

Meanwhile the Sunday Times says early investigations into the trading losses suggest workers at other banks may have helped Mr Rusnak.

The paper quotes an unnamed bank source as saying "at first blush, it looks as though someone else was involved outside Allfirst."

The Sunday Times says if this is proved to be true it could be good news for AIB's shareholders.

It says the Irish bank intends to sue any parties involved in the matter.