Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Bill 2013 and commend the Minister for Public Expenditure and Reform for introducing it to the House.

I share Deputy Lawlor's evaluation of the background to this legislation. When we were canvassing in the last general election, public representatives and candidates from all parties and none found there was a great desire for answers, increased accountability and transparency, as well as for a Parliament that could get to the bottom of issues. We were asked time and again on doorsteps across Wicklow when were we going to investigate the banks and the bank guarantee. Then, as Deputy Lawlor said, we had a referendum on inquiries on which the people made their decision.

This new Bill comes back to put in place on a statutory and legislative footing a mechanism for the Parliament to have reporting inquiries in an efficient manner which can come up with an overview of various issues of the day. This is just one of three Bills that will play a part in increasing the transparency and accountability of this State, the others being the extension of the Freedom of Information Act and the whistleblowers legislation, which is badly needed.

I am a little cynical about the past tribunals of inquiry. I do not believe it was any mistake they were set up in the past. Perhaps they were set up by people who did not want answers to emerge in a quick or a timely fashion. Perhaps they were set up by people who did not want anyone held to account. After all the years and after all the hundreds of millions of euro spent on them, have we learned anything that we did not suspect before? Has anyone been held to account after the Mahon or Moriarty tribunals' findings? That is the real frustration felt by people. After spending hundreds of millions of euro on tribunals, the only people who seemed to benefit were those in the legal profession.

This inquiries Bill has to be about ensuring that we, the elected representatives of the people, can represent our people and put the questions on the issues of the day in an inquiry type format.

The need for a banking inquiry is very real. There is much pub-chatter with people saying they know what went wrong with the banks and have we not had all these investigations already. The Committee of Public Accounts produced a comprehensive report outlining the framework it saw such an inquiry taking. More importantly, the report also set out the questions that remain unanswered or, if they have been answered, require further examination. Will the Minister give serious consideration to these questions in the establishment of any banking inquiry? Some of the issues the committee identified are:

What was the precise sequence of events in the period of weeks leading up to the guarantee?


To what extent was there an adequate evaluation of alternatives to the bank guarantee carried out by Government?


Was the guarantee the optimal policy choice given the alternatives available?


To what extent was the scope of the guarantee the optimal policy decision given the other options available to the Government?


What role, if any, was played by the Cabinet in the run up to the events of the [now infamous] night of 29 September 2008?


To what extent do written records exist of the events leading up to the guarantee, and the guarantee itself?


[Interestingly] Who were the external advisors (formal and informal) [both on the payroll and off the payroll who had the ear of the decision makers and the Government of the day] during the crisis management period and what were their roles?

Regarding the recapitalisation of the banks, the committee's report asked the following questions:

To what extent was the recapitalisation of the banks the optimal policy option given the alternative policies available to the Government?


To what extent have the necessary personnel changes to the management and boards of our banks taken place to ensure an appropriate mix of people with different skills?


What caused the failures in corporate governance in Irish banks?


To what extent was the over-concentration of property-related loans deemed a risk factor by the banks?


Why did banks and other financial institutions deviate significantly from well-established credit policies?

The committee called for an inquiry to look at the role of the Irish Financial Services Regulatory Authority, IFSRA, in the crisis. The report asked:

Why was the tone of enforcement so deferential?


Why did IFSRA fail to bring enforcement action in respect of breaches of regulation?


What was the nature of the information conveyed by IFSRA to the Minister and Department of Finance and [the] Central Bank about the bank lending?

The committee report stated an inquiry needed to examine the role of the Department of Finance in general:

...did the Department of Finance...play a...significant [enough] role in financial stability issues?


What...advice and analysis [was] prepared by the Department of Finance on fiscal and monetary effects of property incentives?


Did the Department of Finance prepare specific reports to Government on the problems in the banks and the potential impact on the economy?


What was the role of the Department of Finance in managing the [emerging] crisis?

The committee stated we need to look at the Oireachtas as a collective. Did it do enough or have enough ability to provide oversight and scrutinise the guarantee? Was the tone in here too deferential as well?

Very importantly, an inquiry needs to look at the role of external auditors in the crisis. I do not believe we have heard nearly enough on this issue. The report asked:

How does the fact that shareholder investment was virtually wiped out in all our banks equate with clear audit reports in the years from 2003 onwards?


To what extent did the work of the external auditors give comfort to the external regulators of banks in relation to banks' business models and lending practices? [Was the Financial Regulator assuming a clean bill of health from the auditors meant all was okay and not enough attention was applied?]


What were the management letters of auditors telling senior management in the years from 2003 onwards?


Were concerns relating to bank governance raised at any stage, especially in Anglo and Irish Nationwide?


Were audit contracts the subject of rotation or change at these financial institutions?


What role did behavioural factors (including [what is commonly referred to as] groupthink and the lack of acceptance of divergent views) play in the crisis?

No one can tell us the banking crisis is behind us, that we have examined all of the issues in full and that we have the reports we need. As we move forward as a nation, we still need to learn an awful lot from what happened over the past number of years. We are still paying a heavy price for it. I believe this legislation will provide the framework and the ability for this House, through whatever mechanisms the Government views appropriate, to have finally a real banking inquiry that can endeavour to answer some of those questions.

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