Michael Noonan (Limerick East, Fine Gael)

I suggest that 2008 is normally seen as the start of the international banking crisis. The collapse of Lehman Brothers on 15 September 2008 is taken as the kick-off point. When it became clear two weeks later that the Irish banking system was in dreadful trouble, leading members of the Government sat in Merrion Street all night. The following day, the Government introduced emergency legislation to provide guarantees for the banks. As the first Government intervention, it was the subject of a reasonable amount of support in this House. My party accepted the Government's arguments at face value and decided, in such emergency circumstances, that the guarantee system deserved cross-party support. The same process has since been repeated in the United States. The main banks there have been rescued and inquiries have taken place. Events there have progressed so rapidly that the US banks which were capitalised have repaid to the federal authorities what they were given and are now trading profitably. When I last examined the statistics, I learned that more than 40 bankers in America were in jail. It is clear, therefore, that we have been very tardy. We have been very slow off the mark. Our banking crisis started a fortnight after the US banking crisis. The US is nearly through its crisis, while we are wondering about the establishment of an inquiry.

I think the public wants an inquiry. These issues involve the public intimately. Many people lost their jobs because of the banks. Many people can no longer pay their mortgages because of the banks. Many people have seen their living standards reduced dramatically because of the banks. Many people are seeing their adult children heading for the airports, in order to travel to Australia and Canada with little enough hope of return, because of the banks. There is a feeling among the people I meet, including those in my constituency, that the banks need to be seen to be held to account in public. By getting involved in the legalities of the inquiry, rather than its primary principles, the Government has missed the point. There is public desire to see accountability in public. It is clear that if one wants accountability in public, it is appropriate to provide for an investigation by an Oireachtas committee, along the lines of the DIRT inquiry presided over by the late Jim Mitchell.

I fully agree that there is need for a preliminary phase of this process. No Oireachtas committee will be effective unless it has a kind of book of evidence, in effect, on which to draw. No court case would be effective, regardless of how eminent the barristers are, if it were not argued on the basis of a book of evidence. The same thing applies here. I have no problem with the proposal to provide for a preliminary stage. It is a very good idea. It was done in the case of the DIRT inquiry and it should be done now. I disagree with the suggestion made by my friend and colleague, Deputy Peter Power, that some kind of legal lacuna makes it impossible for an Oireachtas committee to inquire into these events. I do not believe that is correct. The Supreme Court judgment on the Abbeylara case was sufficiently focused. Nothing prohibits an Oireachtas committee from examining the policies, practices and procedures of the banks. Rather than having some kind of witch hunt that puts heads in baskets, we should consider the banking crisis as a failure of policy, procedure and practice. I refer to political policy, oversight policy and lending policy within the banks.

There is no reason an inquiry along the lines of the DIRT inquiry cannot stay on the right side of the Supreme Court judgment on the Abbeylara case. When he was interviewed on RTE radio's "News at One" earlier today, an eminent senior counsel, Gerard Hogan, stated explicitly that he did not see any problem with such an inquiry. That point has been reinforced by the admirable piece of work produced by Deputy Rabbitte, which deals with another key aspect of the Abbeylara judgment. We have an adequate legal framework to allow for the kind of inquiry the public wants. The Government is missing the point, which is that people need some kind of public catharsis. That will not be achieved by an inquiry that is held behind closed doors, in which people tell their stories in private. Regardless of how eminent the relevant commissioner is, the report he produces and places before the House will be one man's version of events, based on what he has heard in private. The public will have had no participation in that process - it will not have heard the evidence and will not know why certain conclusions have been reached. Ministers, like politicians of all parties, do not enjoy a high level of credibility at the moment. Bankers have very low credibility. Anything that is produced by means of hearings that take place behind closed doors will suffer from a low level of credibility too.

I will comment on two aspects of the proposal that has been made by the Government. It is proposed that both phases of the inquiry will be required to inquire into events up to September 2008. That is like running an inquest but excluding all the evidence that was gathered at the autopsy. It would be best to ascertain what was happening in the banks on the famous night when certain people came into the Minister's office in Merrion Street to look for a guarantee. The Minister received advice from the Central Bank and the Department of Finance as the banks made their case. That file would cast more light on the causes of the banking crisis than the files on many other events would. Anglo Irish Bank did not go down until 8 December 2008 and was not nationalised until January 2009. Surely the events that led to the collapse of Anglo Irish Bank are extremely relevant to this inquiry, as are the events that caused the Government to decide to recapitalise AIB and Bank of Ireland. Surely the justification for the recapitalisation of the banks must arise directly from the problems they faced. How better to cast light on the problems of the Irish banking system than to look at those events, in particular? The judgments of the judge of the commercial court, Peter Kelly, are casting huge amounts of light on, and giving us huge insights into, the lending practices of the banks. As such matters relate to the period after September 2008, that false deadline should be removed. The commission, like the expert who does the preliminary report, should not be told to inquire into everything that happened before 31 August 2008 but not to go any further because the Government was taking action after that date and driving on from there.

The second aspect of the proposal I would like to raise is a common feature of the terms of reference of other inquiries. Many speakers have laid the charge that the Government, in effect, is excluding an inquiry into its own actions. It has been suggested that the Government is prepared to consider the macro-economic causes of the banking crisis and the international crisis, but is not prepared to examine what the Taoiseach did when he was Minister for Finance, what the EU Commissioner, Charlie McCreevy, did when he was responsible for banking regulation in Europe, or any similar events. It is normal for a certain provision to be included in the terms of reference of tribunals of inquiry of this nature. There are several precedents for the inclusion of a catch-all provision that ensures that as well as examining certain events, the tribunal of inquiry also examines the adequacy of the response of the Government, the Departments and the State agencies to those events. I ask the Minister, in his reply, to give a commitment that such a provision will be included in this case.

The adequacy of the response of the Government, Ministers, Departments and State agencies, including the regulators, would also be examined. The Minister has not excluded this provision and, clearly, the amendments before us are not terms of reference. The Taoiseach has given his commitment to listen to the views of a committee of the House before drafting terms of reference. I ask the Minister to commit to including this catch-all provision so that the adequacy of his predecessors' response, as well as those of all relevant Departments including the Department of Finance, can be examined. This would curtail any further accusations that he is attempting to evade political responsibility for these events.

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