Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I thank my colleagues on the inquiry for their work and support over nearly two years. I am aware of their incredible dedication and the work they all put into the process, at a significant cost to themselves in terms of time and commitment. I thank the Chairman, Deputy Ciarán Lynch, in particular not only for his work chairing the sessions, but also for the work he had to put in behind the scenes. It was very interesting observing him for the past 18 months. At times during the inquiry when tensions grew the odd time, he sometimes allowed them to explode and then picked just the right moment to intervene and point to the right direction. There may be a lesson there for the Ceann Comhairle in the dying days of this Dáil. I commend the Chairman on his work. Without his stewardship, we would not be in the position we are in today.

I wish to show my appreciation for the inquiry support team, the investigators, the administrative staff in Agriculture House and the legal team for the work they did. Their work was tremendous and very much went unrecognised. Some of them went through a very difficult time during the inquiry. I thank, in particular, my own assistant, Mr. Conor McCabe, without whose support I would not have been able to be as inquisitive, put the right questions to those who appeared before the inquiry or strengthen a report I ultimately felt I could not support.

Seven years on from the night of the guarantee, it is important that we recognise when talking about the report that people are still paying for the decision. The last of the treasury bonds set up to replace the Anglo Irish Bank promissory notes are not due to expire until 2053. People continue to suffer as a direct result of the causes of the crisis and the policy responses. People wanted those at the helm to be held accountable for their actions. That is what we attempted in the public hearings of the inquiry, which I believe were successful.

The report itself finally lays to rest the myth that "We all partied", as was mentioned already. The critical fault line in the loan books of the banking sector was in commercial property. From 2000 to 2008, banks increased their lending from over €100 billion to €400 billion, with a heavy concentration on commercial real estate. This was a very select business that was concentrated in the hands of a small number of individuals. By September 2008, the top 25 customers in Irish Nationwide represented 51% of the its entire commercial loan book.In Anglo Irish Bank, 20 customers accounted for 50% of the Irish loan book. Just 190 people had debts of €62 billion in the covered institutions. This was not by accident. It was core to the growth strategies of the banks, funded through credit sourced from the international wholesale markets.

Anglo Irish Bank was a monoline bank focusing almost exclusively on commercial property lending. Irish Nationwide followed this strategy, with almost 85% of its loan portfolio centred on commercial property activity. Soon both AIB and Bank of Ireland jumped in. By 2008 in the Irish banking system, there were just 29 property developers with borrowings equivalent to 18% of Irish GDP. That was of a direct result of bank lending policy, Government tax and planning policy, and Government regulation policy, which was light touch in the extreme.

The American academic Professor Ed Kane, who gave evidence to the inquiry, once said that the resolution of a crisis is often informed by a political and economic struggle over who pays for the losses, and that a crisis is defined by the battle over loss allocation. The struggle over who should pay for the crisis is the defining event of our time. It is felt in every town and village across the State. It is also felt abroad in places where hundreds of thousands of our young people now reside, having been forced to emigrate as a result of the policies of the establishment parties.

The Irish people were told by the Fianna Fáil-led Government that they had to carry the can for the banks and developers because, somehow, it was their fault for wanting to provide homes for their families. The reality, however, is that the crisis was caused not by the masses but by the few. It was caused by the lending and speculative activities of a tiny group of bankers and developers, spurred on by a Fianna Fáil-led Government. When the crisis revealed itself, that Government gave the banks and developers a blanket guarantee that led directly to Ireland's seeking of a bailout programme. Will we hear an apology for the lie that we all partied? I will not hold my breath.

While the report touches upon this cosy relationship between bankers, developers and politicians, it fails to examine those relationships in any critical way. These relationships were raised by Professor Morgan Kelly in an article in The Irish Timesin January 2009. He criticised the Government’s assertion that Anglo Irish Bank was worthy of a bailout. He said the reality is that Anglo existed "as a vehicle for a few politically connected individuals to place reckless bets on the commercial property market". He stated:

The proposed Anglo nationalisation marks a decisive watershed in Irish democracy. With it, an Irish government has coolly looked its citizens in the eye and said: “Sorry, but your priorities are not ours.”

This goes to the heart of how Ireland really works and whose interests the State serves when push comes to shove. Addressing this was the whole purpose of the nexus phase of our inquiry. Our terms of reference, set by this House, required that we critically analyse the links between banks, property and politics. Unfortunately, it is a key aspect of this whole crisis that is all but missing in the report, which lists events and policy responses but does not analyse them in any meaningful way. It has been explained why some of that analysis is missing, making reference to time constraints we were under. The report merely presents a rationale for the key players' position and presents their viewpoint as the defining narrative of the crisis. This is unacceptable and a fundamental failing in the report.

The report also fails to consider in any real way the operation of NAMA and whether its policies were appropriate. NAMA was forced by the current Minister for Finance to reclaim a certain proportion of its bonds by a certain date and this led it to hold a fire sale of its commercial properties, yet we have seen an increase each year in the value of commercial property. Last year alone, there was an increase in the value of commercial property of 21.7%. However, that uplift is now in the hands of private speculators, not NAMA. The real question we need to be asking ourselves is how many billions the State has lost by this fire-sale policy. We do not know. NAMA has now become a debt collection agency. It has ceased to be an asset management agency. This policy, initiated by the Minister for Finance, Deputy Michael Noonan, was not analysed in the report. There is absolutely no reflection in the report on the business strategy of NAMA and whether any lessons can or should be learned from it. Instead, we get the impression that NAMA is working away in the best interest of the State and that we can reflect on its policies only after it has finished its operations, or after the horses have bolted. What is the point in that? I refer again to our terms of reference.

The report does not deal in any substantive way with the liquidation of IBRC. We all remember the famous "prom night" in this House. Are we seriously to believe that there is no room for reflection on the actions presented at that time by the Minister for Finance? The liquidation of IBRC fell within the terms of reference of the inquiry, but on that event the report is mostly silent. With regard to burden sharing, the failure to pursue effectively this option imposed an immense cost on the Irish people in terms of crisis resolution.

In the run-up to the 2011 election, the current Minister for Finance told the Irish people that "once Anglo ceases to have a bank licence, burden-sharing by its senior bondholders would become a reality as it would no longer be considered capable of having a contagion effect". On 9 February 2011, weeks before the people went to the polls, the current Taoiseach, Deputy Enda Kenny, said the "the junior, and senior, and non-guaranteed bondholders are going to have to pay the price".

However, within three weeks of its formation, the new Government ditched those election promises and adopted a policy that no senior bondholder would be left behind. This was despite the fact that the banking inquiry uncovered that the National Treasury Management Agency had informed the Fine Gael-Labour Party Government at the time that the markets not only expected burden sharing but had priced it in. We also know from the banking inquiry that the Minister for Finance made two telephone calls to Jean-Claude Trichet as part of the negotiations on the issue, on which he spent half of one day. Despite the finding in the report, the Government ultimately had the power to impose or not to impose burden sharing on bondholders and it took the decision not to do so. That the Minister spent one paltry afternoon on this issue and made only two telephone calls in connection with it shows the level of seriousness that he accorded the matter.

The question we must ask ourselves is whether lessons have been learned. One of the clear lessons for anyone reading the report is that the Fianna Fáil-led Government reduced sustainable tax levels and placed its hopes in unsustainable tax levels. While affordable at the time, this approach was not affordable for the country in the long term. The Government is promising exactly the same approach, with Fine Gael planning to cut taxes by €22 billion and the Labour Party promising a version of the same thing.

The Government has applauded the banking inquiry report and why not given that the boom and bust approach of cutting taxes to win votes pursued by the Fianna Fáil Party is now Government policy. On this issue, unfortunately, it has learned nothing from the past.

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