Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

They must be brought before the inquiry and asked the hard questions by the members of the team as to why they radically departed from the traditional banking model in the years leading up to the crisis. What were the credit committees doing? Why was there no proper assessment of risk in those institutions? Why were they relying on cheap money on the inter-bank markets and lending it out long term substantially to one sector of the economy, the property sector? The role of the Financial Regulator, which had statutory responsibility for the regulation of the institutions, will be a crucial aspect of the inquiry. Some of the evidence in the recent Anglo Irish Bank trial concerning the Financial Regulator was extraordinary. I can say no more than that for fear of being accused of bias. It is vital we get into that in detail.

All the institutions had clean audit reports in the years leading up to the crisis. The external auditors, who were paid handsomely during those years, also need to be held to account for their role and the decisions they made. The professional advisory firms, which advised the Government and State agencies on the health of the financial institutions, must also be held to account for their role and the advice they gave.

The Tánaiste's remarks very conveniently excluded any policy decision or development since the current Government came to office. It would be a mistake for the inquiry to do the same. The role of the international authorities, particularly the European Central Bank, must be an important part of the inquiry. It might suit some to blame the bank guarantee for everything, and say it was the sole reason that €64 billion of losses fell on the shoulders of Irish citizens. However, at the end of the bank guarantee, in September 2010, some €20 billion of senior bonds which came out of guarantee and were completely unsecured, were paid in full. The role of the ECB was very significant in that regard and correspondence exists from November 2010 on that matter. That must be brought to the floor of the inquiry and those involved must be questioned. The Government saw it but failed to impose losses on those same senior bondholders and was rebuffed by the ECB. I take a very dim view of what we are hearing from Frankfurt, that the ECB may object to the release of the relevant correspondence.

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