What is a little more surprising is the continued linkage of her exit from Bank of Ireland, due to take place this autumn, with the issue of bankers’ pay caps.

McDonagh has been quite vocal on this subject in the past and has also lost a CFO to an Irish corporate where the pay cap could well have been a factor.

McDonagh’s own legacy and achievements at the bank may be overshadowed by the media taking her exit as another opportunity to raise the issue of bankers’ pay and the effective ban on bonuses.

Pay caps are a political matter and they remain politically pretty toxic. The only time a finance minister is going to get rid of them is when he/she thinks nobody is looking.

That won’t be any time soon.

With the rising cost of living, economic uncertainty over energy prices and supply, and lots more to ensure consumer/voter anger is high, I don’t see any movement on this issue in the short term.

If you want to understand the dynamics of senior executive management in banking and pay caps, you only have to look at Credit Suisse.

The bank has had a series of scandals and financial disasters from the failed supply chain finance group Greensill Capital to the defunct family office of Archegos that engulfed Credit Suisse in a scandal last year.

Throw in the fact that the relatively new chairman had to go for breaching Covid restrictions while a CEO had to leave in the wake of a spying scandal. This involved some private investigators following an executive around.

Put together, it makes banking in Zurich sound a lot more interesting than one might have thought.

But aside from that, how much money were all these senior figures at Credit Suisse being paid to make such a mess of things?

McDonagh joins the bank at a very senior level where she will run the European operations and join the
executive board.

No doubt she will get stuck into playing her part in rebuilding the organisation after a few bad years.

But there has been a massive clearout at the top of Credit Suisse as part of a badly needed restructuring.

The drawback of pay caps for senior bankers is that you will either lose good people to rivals or fail to attract the right people when jobs become available.

But paying massive salaries is no guarantee of avoiding massive cock-ups. The absence of pay caps at Zurich didn’t ensure the right culture, decision-making or even adherence to Covid restrictions.

They messed it up anyway.

Where McDonagh has a very strong point on pay caps is when she says they don’t apply to every bank operating in Ireland. Executives can work at one bank in the IFSC in Dublin and earn a multiple of what they could earn at one of the state bailed-out banks. As for bonuses, it seems the effective block on bonuses is either a punishment or a lack of trust that bankers will lend responsibly. If it is the former, then when will the bankers have “done their time”?

If it is the latter, then surely it is up to bank boards and regulators to ensure responsible lending takes place which is not driven by the short-term pursuit of bonuses.

Does it really need legislation?

When McDonagh arrived at Bank of Ireland in October 2017, it had come through the surgery of the financial crisis but needed to recover.

Her legacy is around pushing through the investment IT and the switch to online banking, restoring the bank’s profitability, and also evolving the bank’s culture.

She wasn’t long in the job when she unreservedly apologised on behalf of the bank to an Oireachtas committee for the lender’s handling of the tracker mortgage scandal.

“Quite simply, I believe Bank of Ireland took too long to get to the right position and didn’t go far enough in putting the customer first,” she said.

Only an outsider new to the job could have said that. It was a refreshing reset in the banking sector’s response to the crisis.

It may require another outsider in the CEO seat when the bank’s fine for the tracker mortgage scandal emerges, unless it is announced before she leaves later this year.

Moving to online to keep pace with changes in retail banking is one thing, but shutting 103 branches on the island of Ireland is another.

It has been a painful transition for many people, especially in rural communities, as well as for staff.

Back in profitability and heavily reliant on the mortgage market for growth, her successor may find the job a bit less interesting.

Winter really is coming.

The phrase ‘winter is coming’ is taking on a whole new meaning. The World Bank says we are in for the biggest energy price shock since the 1970s. Price increases to date are likely to be just the beginning.

You know you are in trouble when the Government decides to spend money on advertisements showing ways of reducing our energy consumption. Drive more slowly. Turn down the heat setting in the house.

This is all good stuff, but it could well be a warm-up, not so much for battling higher prices as cutting consumption to prepare for rationing.

Taking the energy-saving measures recommended by the Government should be good for the environment. But if we were serious about that issue, we would have done it already.

Energy-saving measures should also save us money too.

Equally, that has always been true. The real driving force behind the Government’s campaign is more likely to be a growing realisation that we could fall short of power this winter.

Think back to before Russia’s invasion of Ukraine. We were already seeing demand spikes and pressure on the electricity grid.

Given the potential shortage of gas supplies to Europe from the worsening political situation, it is hard to see where all of this power generation capacity is going to come from.

Some economists believe GDP could grow by as much as 8pc this year. Even if that does not fully reflect real economic activity, it points to a lot of new energy demand.

The Corrib gas field supplies about one-third of our demand. The rest comes from the UK, much of which comes from the North Sea or Norway. There are likely to be greater demands on those sources from other countries but the UK will continue to be in the queue ahead of us. 

Plus Ireland may be expected to show solidarity on supplies with our EU partners if supply challenges cause real damage on the continent.

Gas buyers in Germany appear to be blinking first by looking for ways of paying for Russian gas in roubles.

But this has a long way to run.  

The real crunch time will come at the end of the summer.

Time to slow down, switch off lights and turn down the heat. If only it were that easy.

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