Patrick Honohan: merger

A culture clash is looming at the Financial Regulator as new chief executive Matthew Elderfield looks set to bypass existing heads of department as candidates for the top positions in the restructured organisation.

It is understood Elderfield caused disquiet among certain senior staff after outsider Jonathan McMahon was appointed assistant director general for financial institutions supervision ahead of two long-serving internal candidates in what one industry source said was "a sign of things to come".

There have been 35 new appointments at the regulator in the last year as part of a major revamp that will see the organisation merged with the Central Bank under new governor Patrick Honohan.

Sources say new staff will occupy 50% of all positions. Continuing that policy it is believed two of the four remaining positions as assistant director general will be filled by outsiders. The other two positions are expected to be filled internally, not from current heads of department but from the level below that.