Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

In addition, there has been the active promotion of conspiracies and a refusal to accept clear evidence which disproves these conspiracies. Most cynically, there has been the constant attack on the motives of individuals and the making of snide, misleading and cynical comments. This is not a limited concern. All the evidence is that the public have grown wary of how parties in this House behave. The public have come to doubt whether politicians are interested in understanding the crisis or just exploiting it.

The establishment of this inquiry is unique in our history, not just because it is the first inquiry under a new statute but more fundamentally it follows the rejection by the people of a constitutional amendment which the Government intended as the basis for stronger powers for this specific inquiry. In promoting the failed amendment, the Government said repeatedly that its first use would be in a banking inquiry. The only issue which arose during that referendum campaign was whether Members of the Oireachtas could be trusted to behave impartially when making findings about individuals. The answer was "No". The people did not trust that politicians would use their new powers fairly.

The tendency to prejudge issues before an inquiry has begun is one which has a long history in this House and, unfortunately, the inquiry is being established against the backdrop of repeated comments giving a direct party political judgment. The Taoiseach's comments last week are just the latest in a long list in which he and his colleagues have already announced an answer to the question this inquiry is supposed to answer.

I wish my constituency colleague, Deputy Ciarán Lynch, well in his appointment by the Government to the role of Chairman of the inquiry. It would have been a better precedent if the Government had been willing to consult on this matter, given that the inquiry is supposed to be non-partisan. I know that Deputy Lynch will acknowledge that he has previously made statements in this House and elsewhere, giving his fixed opinion about the banking crisis. His speech in this House in January 2010 on the very issue of a banking inquiry left no doubt that he believed it was already known what had happened and who was to blame. It would be a good start to a genuinely non-partisan inquiry if instead of just claiming impartiality, he and others would expressly explain how past words will not be allowed to prejudice the inquiry.

The public want to understand what happened, why it happened, what would have stopped it happening and how to stop it happening again.

It is not true to state that six years on we know nothing or nothing has been inquired into. On top of independent expert reports, countless accounts have been written and a large number of documents released, of which the three principal ones are the Regling-Watson, Honohan and Nyberg reports. While the Nyberg report was conducted in public, it was comprehensive in its account of a range of issues. We also have six years of experience of the context in which the banking crisis emerged and the actions that have restored stability here and throughout the eurozone.

There was a deep regulatory failure here and in much of Europe and the United States. Activity took place that either bordered on illegality or was allowed to continue when it should have been stopped. As I have stated repeatedly in the past six years, the Government bears its responsibilities. This House failed to show any real interest in the regulation of the banking sector before the crisis. Financial regulation was not an issue in any general election before 2011.

There was a wider complacency informed by large numbers of independent assessments, both domestic and international. Vitally, there was the European context of a new currency and central bank being established without any uniform approach to regulation or bank resolution. If the inquiry is to address the demands of members of the public rather than party interests, it will have to fulfil two general conditions. First, it must be genuinely independent and objective and, second, it must inquire into the full range of issues behind the banking crisis, not only political areas that have been cherry-picked.

The committee will begin its work against a backdrop in which the Government has not demonstrated an eagerness to allow real independence by committees. The campaign last year to leak material against Deputy John McGuinness and to try to remove him as Chairman of the Committee of Public Accounts was as crude as it was political. Thankfully, at least one Government Deputy was willing to expose the behaviour of the Government in that case. Deputy McGuinness has continued to show independence in his role, even in the face of aggressive attempts by the Government to limit his committee's work.

As I stated, the announcement by the Government that it had chosen the inquiry's chairman was a poor start. Equally, the Taoiseach's attempt to make it an explicitly political inquiry did nothing more than reveal what has been a standard tactic. If the Government wants the inquiry to be genuinely independent, the committee should adopt a formal rule, to be agreed with the Government, that Ministers will not communicate with members about the committee's work. The Government should also inform the Secretary General to the Government that Ministers should not be informed of requests for documentation or other evidence that are submitted by the committee.

I have followed up the Taoiseach's deeply cynical and crude statements that files concerning the bank guarantee were disappeared "behind radiators" or otherwise. Following a correspondence with the Secretary General to the Department of the Taoiseach, who is legally responsible for the protection of all public records in that Department, he has confirmed that the Department is in compliance with is responsibilities under the National Archives Act.

There is no great mystery about the decision on the guarantee. Deputies may disagree with it if they wish but the implication that those involved or anyone else have hidden something is despicable, baseless and the lowest form of politics. It reflects badly on those who indulge in such behaviour and if it is continued in this inquiry, it will undermine the public standing of the inquiry.

I completely reject the idea that to be robust in inquiring into this issue, one must question the good faith of those who took critical decisions. While legitimate criticism must always be allowed, equally, the good faith and public interest of individuals cannot be pushed aside for party purposes. If this is to be a genuinely independent and useful inquiry, it will need to have significant expert advice available to it. This does not mean that its members need people who can write politically effective questions for them but qualified individuals who can help guide them through highly technical issues, as well as help ensure that they focus their work on issues which address the root causes and course of the banking crisis, rather than just those areas where media attention is easiest to secure.

If the inquiry is allowed to be genuinely independent and non-partisan and behaves as such, it will receive the goodwill of all sides of the House and, more important, of the people. This is not enough, however. The inquiry must not have its terms of reference fixed to focus on a handful of events. Only a broad inquiry is capable of going wherever the evidence leads and addressing a crisis which cannot be understood through soundbites.

While the Taoiseach has pre-judged the root of the regulatory failure underpinning the crisis, this clearly has to be a central element of the inquiry's work. If one looks back at the debate on the 2003 Act, one finds that the opposition to the proposed regulatory framework was entirely based on the inclusion of consumer protection in the work of the Financial Regulator. No one predicted that what was being proposed would fail in the manner it did. While the deficiencies of principles based regulation are now clear, what is not clear is that any then established regulatory approach would have prevented the bubble and subsequent crash.

The reforms introduced in 2010 by our late colleague, the former Minister for Finance, Mr. Brian Lenihan, remain the only significant changes to the regulatory system that have been enacted in the last six years. This being so, Fine Gael and the Labour Party clearly cannot claim that there is an alternative regulatory blueprint which has been neglected.

Every independent expert has pointed to the centrality of European policies in the credit bubble and collapse and their implications for national finances. The progress that has been achieved is considered to be overwhelmingly the result of the major changes made to European Union policies in the past three years and the radicalism of the President of the Central Bank, Mr. Mario Draghi. The impact of now abandoned European policies on Ireland must be included in the inquiry's work and so too must an honest evaluation of the specific constraints under which decisions were taken at various points. The old rhetoric of simply telling Frankfurt and others to get lost is long past tired. Freedom of action is nice for political speeches but an illusion if one wants an honest understanding of a crisis such as this.

The inquiry should take a detached look at the assessment of risk and preparation of economic forecasts. The Government has taken a number of initiatives in this regard. These remain unproven and, in the case of the Irish Fiscal Advisory Council, its recommendations have been ignored. What we need is an honest assessment of how the forecasts were so consistently wrong. This is not just an Irish issue. The European Commission was very bullish about Ireland in 2007 and early 2008. In 2007, the OECD studied our property market and stated that prices were reflective of strong fundamentals.

In terms of the work of the Oireachtas, the inquiry should examine how the Oireachtas failed to play a role in at least advocating policies to prevent the crisis. In the years immediately before the crash, the House spent more time debating greyhound doping than the prudential regulation of the financial sector.

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