Irish MEP Brian Hayes has asked the Single Supervisory Mechanism (SSM) in Frankfurt to clarify if it is investigating a complaint from a whistleblower that AIB exaggerated its progress in recent years in dealing with problem loans.

“In the interest of transparency I have asked the SSM to disclose whether it has received this complaint and will investigate it,” Mr Hayes said. “I have also sought to find out what the SSM procedures are for investigating complaints such as these from whistleblowers. This complaint is of a most serious nature. Any assertion that a bank did not accurately report on the status of its loan book cannot be taken lightly.”

The SSM has responsibility for direct supervision of euro zone banks, and is the entity that would investigate this claim against AIB, with assistance from the Central Bank of Ireland.

Mr Hayes noted that the bank could be fined 10 per cent of the amount of its annual turnover by the SSM if it fails to comply with ECB legal acts. The Fine Gael politician has asked the SSM to clarify what "specific sanctions" it might impose on a bank if it does not accurately report on the status of impaired or non-performing loans.

“Given the problems Ireland’s main banks have experienced with their balance sheets throughout the financial crisis, I believe it is of utmost importance that we are aware of the procedures involved in investigating any reporting breaches and what the consequences will be.”

News of the whistleblower’s allegations emerged late last week. At the time AIB said it had not been “made aware” of the claims, but it is understood there has been contact with regulators in recent days in relation to the matter.