Oireachtas Joint and Select Committees

Wednesday, 25 September 2013

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Matters Relating to the Economy: Discussion with Governor of Central Bank

3:10 pm

Professor Patrick Honohan:

That is a good question. I will also answer the first point that Deputy Pearse Doherty made. We are not just looking for regulatory breaches; we were looking for a link between what was in the public arena in the Sunday Independent and the interaction between Anglo Irish Bank and the Central Bank. I referred to it facetiously in response to Deputy Kieran O'Donnell and I am sorry for that. That is what is potentially of value as a finding of evidence of some criminal activity and there was a failure to find that link. We do not have evidence of them following up in any effective way on what the gameplan was. That is what is missing. Even for an attempted criminal offence, standards are higher than one might think. We often come up against the high evidential standard and the definition of various crimes. At the Committee of Public Accounts in June or July, Matthew Elderfield pointed out that it is very difficult to take sanctions against individuals with the structure that is in place. Also during the summer, the British Parliamentary Commission on Banking Standards produced a report based on the British banking crisis and the various things that could be done. One of the things that it suggested, which the Central Bank has been considering for quite a while, is a novel criminal offence of reckless misconduct in the management of the bank. The parliamentary commission recommended that offence. We are talking about mismanagement on a large scale. You are the Members of the Oireachtas. We have come up against legislative barriers.

With regard to the next question, the Central Bank did not have the recordings in spring 2009. The Financial Regulator at the time was sent a transcript of part of communications between the Central Bank and Anglo Irish Bank. It was sent by the new management of Anglo Irish Bank but it was a selected transcript.