Paschal Donohoe (Fine Gael)

There is a need for plain speaking in regard to the discussion we are having. The reason there will not be a public inquiry into the causes of our banking crisis is that the Taoiseach and his predecessor do not want to find themselves in a situation where they are being questioned or interrogated in public regarding their role in the creation of the current difficulty. That is it. The Taoiseach, who previously acted as Minister for Finance, was at the heart of the regulatory regime and the financial environment that created the difficulty our country is now dealing with. The single reason this will not happen in public is that the Taoiseach and his party do not want it to happen in public because they do not want to find themselves in a situation where the public can see them questioned and challenged on the role they played in creating that difficulty.

I have heard other colleagues refer to the Chilcot inquiry that is taking place in the UK at present into the reasons the British Government took its country to war. If that Government can mount an investigation in public about why its country went to war, why are we as a country not capable of delivering a process and a platform that in public will question and seek to understand the causes of the huge, historic difficulty our country now finds itself facing?

If one types "Chilcot inquiry" into an Internet search, one can see the process taking place live. Members of the public have a right to attend and to understand what has happened because of the war their country is in, and the loss of life the country faced which has been incurred in Iraq and elsewhere. We have heard members of the Government offer justifications as to why the inquiry cannot be held in public. They have said there is not the level of expertise required in the Oireachtas to do this work properly, but we are the people elected to take responsibility. Members of this Chamber and the Dáil supported the Government and passed legislation when it was needed to allow the banking system to survive, to put in place an agency to enable the banks to be kept in place and monitored. We are the people, to whom the public look to be responsible, to lead the country and take responsibility for the national finances. However, the Government concludes that we are not capable of carrying out an investigation into why this happened. The Abbeylara judgment will be rolled out as a reason the investigation cannot take place in public. Many of my colleagues have spoken about how irrelevant that argument is to this discussion. This investigation will not be about the guilt of individuals but having an forensic understanding of the role agencies and bodies played in creating this huge mess that will have to be paid for by this and the next generation of taxpayers.

Senator Butler who has considerable expertise and knowledge in this area has said we know the reasons, on which I have to completely disagree with him. We do not know how this crisis happened. We do not know why the Irish regulator stood by and watched the banking system put in place the seeds of its own destruction. We do not know why there was complete regulatory failure for three, four or five years in the run-up to implementation of the banking guarantee scheme. Furthermore, we do not know why the then Government decided to put in place a regime of tax breaks that supported one sector of the economy, despite the fact that members of my political party, to whom the Government would not listen, and organisations such as the OECD and the IMF said it was risky, not sustainable and would create trouble for the future. This inquiry is relevant not only because of the cost with which the taxpayer will have to deal or the tens of thousands of jobs that have been lost owing to what has happened in the banking system, but also because if we do not do this work properly, we will run the risk of the country finding itself in the same situation, facing the same costs as a result of the same mistakes being made again.

A recent study of the history of financial crises was published in the United States by two respected academics who titled their book, This Time Is Different. It shows how governments of all persuasions, regulators, shareholders and commentators, each time a country was in the middle of a huge boom which appeared to be unsustainable, convinced themselves that this time it was different, that it was not the same as the last crash and that the boom would be sustainable. We cannot allow that to happen anymore because the cost of economic crashes is increasing. The cost of this crash and the effect it has had on the national finances and will have on future generations are immense. It is simply unthinkable that this would happen again.

It is also unthinkable that putting in place a process such as this will placate and satisfy taxpayers who will have to pay for it. It appears to be easy to lose one's sense of outrage about what is happening. It is easy to assume that all of this is normal, that it is just part of the new political events with which we will have to deal. It is easy to say that what we need to do is to default back into normal political and business life and that everything will be okay. However, at the heart of the current economic depression, most of which we inflicted on ourselves, is the political failure of the Government to challenge the decisions the institutions made, to say they were unwise or unsustainable, and to sound warning bells.

The process that is to be put in place in private is being put in place for explicitly political reasons. This is being done to allow the Government to avoid being subject to criticism and castigation. However, far more worrying is the fact that we will deprive ourselves of the opportunity to learn the lessons that should be learned and participate in the process to make sure this will not happen again. That is truly unforgivable.