Mr. Tim Vaughan:

I thank the Chairman for the opportunity to address him and his colleagues today. I will deal with the issues I have been asked to address, with specific reference to the Irish Examiner and our editorial policy on the economy and the property boom from 2002 to 2007, as referred to in the invitation from the committee.

I would first like to give a brief introduction to the Irish Examiner. It is a broad-based mid-market newspaper, publishing six days a week, with an increasingly active online presence across many platforms. I have been editor since 2001. While we have a respected national profile, our circulation is significant in Cork and Munster, where we have the largest readership of any daily newspaper. My role as editor is to lead a great team who make it happen every day.

A trusted newspaper must inform honestly and accurately. It must ask questions and challenge where questions need to be asked and answers found. It must present a broad range of diverse opinion and it must know and engage with its readers. If it does all of these things successfully, it generates enough income to pay the wages of its employees, contributors, contractors, suppliers and shareholders. That income is derived almost exclusively from two revenue streams: the cover price of the newspaper, and advertising.

I turn now to the specific area the committee asked me to consider, our editorial policy on the economy and the property boom and the approach to reporting on the property market and the Irish economy. As far as the Irish Examineris concerned, during the period in question we approached reporting on the economy and the property market in the same way that we approach reporting across the broad spectrum of the newspaper. We endeavoured to ensure our reporting was accurate and reflected the facts. The newspaper reflected all shades of opinion during these years, including prominent warnings going back to 1999 and throughout the Celtic tiger era that the property boom could not last forever.

What our coverage did at the time was reflect the preoccupation with property in a country experiencing an unprecedented boom. We reported what was happening and what authoritative institutions such as the Central Bank, the Economic and Social Research Institute, the International Monetary Fund, the European Central Bank and the Organisation for Economic Co-operation and Development stated about what was happening.

No newspaper lives apart from its readers, and their preoccupation with and enjoyment of the financial benefits of that era were reflected in our columns. Nobody who lived through that period, proclaimed throughout the world by our political leaders as an economic miracle, was immune from the spirit of the time. It was the prevailing narrative of the political, banking and property establishment. At the time, we had little or no reason to believe that key figures in our financial regulatory infrastructure were not functioning as they should have been in the best interest of the State and its citizens, and nor was there a level of transparency around the regulatory process for the banking system that would have allowed us to access information that subsequently emerged after the crash, too late, when the damage was done. Believe me when I say that had I or any of my colleagues in the Irish Examinerbeen able to access that critical information about the real state of our financial institutions and their methods of operation in those years and months leading up to the bank guarantee, I would have published it. It would not have been enough to have been privy to that inside information; I would have had to be able to prove it in a court of a law. Publishing what one knows to be true does not mean one cannot be successfully sued for libel. That is a point worth remembering when people question why the media does not publish what the dogs in the street might know.

Turning to the property market specifically, aside from reporting property news and commentary in the main newspaper, we introduced a weekend section with a property element in the mid-1980s. This was a period of deep recession in Ireland and a world away from the property boom, but property editorial was of interest and was important to our readers, just as it is today. That weekend section also included the usual mix of features, including television highlights and generally softer-focus content suitable for relaxed reading at the weekend. In the mid-1990s, due to the increasing popularity of the sector and as the economy improved, the property element became a standalone publication, focusing on residential homes, which continues to this day. In 2001 we introduced a commercial property section for Thursdays.

The purpose of the weekend property magazine is to provide readers with factual information on property for sale throughout the country, but primarily in the Munster region. In essence, it is a mix of properties for sale, with a brief factual description, in addition to larger spreads for more distinctive and striking properties for sale that we think may be of interest to readers. It also has sections on interior design, home improvements, gardening, antiques, etc. It has been an important forum for informing readers of the types and costs of properties available for sale, along with additional advertising from furniture and home interior companies, DIY and gardening businesses, etc.

Advertising in the property section was an important and valued source of revenue during the Celtic tiger years - as it was before and still is - but it is important to stress that advertisers did not seek to influence the editorial policy of the newspaper, and the fact that such advertising was an important source of revenue certainly did not hinder our warnings over several years about the dangers of a financial crash. In my entire time as editor of this family-owned company, the owners never once sought to interfere editorially. The family has been publishing newspapers since the 1800s and I am in the privileged position of being the beneficiary of its strong belief in editorial independence. That is important in the context of what the committee is seeking to establish with regard to the media during the period in question.

During that time, our property-related coverage reported factual information such as rising property prices, ESRI and Central Bank reports, pronouncements of leaders in their fields and Government-related interventions in the property market. Although many of the articles published during this period mirrored the widely held view of the majority of commentators at the time - in particular, a prediction of a soft landing - it was not all one-way traffic. Many articles containing opinion contrary to the prevailing view of the property market were also published in our newspaper. As far back as 1999, we reported on spiralling house prices and warnings from the then Governor of the Central Bank, Maurice O’Connell, that banks were "lending too much money too easily". A year before Morgan Kelly warned in 2006 of an imminent crash, the historian Ryle Dwyer wrote a column for the Irish Examinerheadlined "Why the housing boom could collapse like a ton of bricks." In his article, he wrote "The threat posed ... is patently obvious, yet it is being largely ignored, even though it threatens the social, financial and political fabric of society." Warning consistently over many years, he drew parallels with the speculative property boom that caused the economic collapse of Japan. He further stated "Is anyone so foolish as to think that what happened in Japan couldn't happen here?". That was in February 2005, over three and a half years before the State’s guarantee of the banks and almost six years before the bailout by the troika. Between Maurice O’Connell’s warning in 1999 and Ryle Dwyer’s in 2005, we published many articles, including editorial commentary, which questioned the viability of the boom, and particularly the danger to the economy posed by the property bubble. In 2004, we asked whether the glowing economic predictions of the time were based on sound financial principles, on the speculation bubble or on overly optimistic aspirations. I have supplied the committee with some sample editorial coverage of these warnings over the years.

With regard to the contribution of the media to public understanding and debate around fiscal budgetary policies and their applications, in addressing this section I wish to restrict my response to the newspaper for which I have responsibility and knowledge rather than presenting a critique of the media generally. During the period covered here, the investigative eye of the newspaper was trained on those ultimately responsible for the fiscal and budgetary policies of the State, namely the Government. Critical analyses of the policies of the Government formed part of the opinion editorials of the Irish Examinerduring the property boom. As referred to earlier, the threats of rapidly increasing house prices and a failure to put on the brakes were published in the newspaper as early as 1999 and continued throughout the boom years. There was no change of editorial policy during those years. Our approach as a newspaper has been to accurately report the news and comment objectively on the facts as far as they were available to us. Alongside that, I continued our long-standing tradition of providing a platform to all shades of opinion, including those with which I might have strongly disagreed.

Much of the information on the causes of the crash that have subsequently come to light as a result of various reports and the work of this inquiry to date was not only not in the public domain in the lead up to the banking crisis but was inaccessible to us. Our reporting was influenced by the information available to us. We had articles, editorials, columnists and commentators who, as the Celtic tiger roared, argued, in effect, that it was out of control and would end in tears. They argued that there was something fundamentally wrong with the fact that somebody on a €40,000 salary was eligible for a €400,000 loan to buy a house. Nevertheless, the predominant public sentiment in political, financial and property circles was that at worst the boom was going to end with that oft-quoted soft landing. That predominant sentiment found its reflection in media coverage of the time in our newspaper and everywhere else.

A daily national newspaper such as ours is necessarily general in nature, with a mix of news, sport, business and features between its covers. We are not a Financial Timesor a Wall Street Journalstaffed by a big team of financial forensic experts. We are reliant on agents of the State to be competent, professional, open, honest and reliable in what they do and say, and then we report on that. Our reporting on the economy during the period in question was as balanced, diverse and well informed as was possible given the information available to us, which was not all of the information available to various agents of the State. If we were guilty of anything - and I believe we were - it is that we believed and accepted that institutions such as the financial regulatory authorities were doing their jobs and doing them competently, with due diligence, appropriate compliance policies and proper political and departmental oversight, all of which we believed were designed to ensure the stability of our economy. From what we know as a result of the Honohan, Regling-Watson and Nyberg reports and the contributions of others to this inquiry, it appears to be obvious that our trust in these various arms and agents of the State was, to say the least, misplaced.

I acknowledge that there was insufficient critique of the frequent claims that there would be no crash and our so-called economic miracle would continue to be an example to the world. We should have more rigorously challenged the predictions of analysts and economists, including those who contributed to our newspaper and those who had direct or indirect associations with financial institutions.

While this is an accusation that could be levelled at many editors and publishers throughout the world, much better resourced than my own organisation, it remains a matter of personal regret. That said, it is with the benefit of hindsight which has been conveniently available to an earlier witness, Dr. Julien Mercille, but not to those of us living and working here at the time. Even if we had been more questioning of the positive analysis and predictions for the economy and if we had even more contrarian voices to highlight, I doubt very much that it would have gone any meaningful way towards preventing the property bubble or the crash. We still would have been unable to find out the true state of banks and their own regulation and we would still have been faced with an alignment of authority in the form of the IMF, the ECB, the European Commission, the international credit agencies, the Taoiseach, the Minister for Finance, the Central Bank and the ESRI who were all of the view that our economic fundamentals were sound with the IMF giving Ireland a clean bill of health as late as 2006-2007. It is difficult to envisage how any media organisation could effectively challenge such a formidable consensus.