Dan Boyle (Green Party)

These are two very sobering reports. I use the word "sobering" in its widest sense because the reports describe the behaviour of financial institutions which acted as bartenders at a free bar that lasted for at least a decade. The resulting hangover is one for which the country is now paying the price. That said, the two reports are open and honest in their assessment of what has happened and give indications as to where the Oireachtas needs to go to obtain further answers in getting to the bottom of what has been an unacceptable part of Irish economic history. I refer, in particular, to the behaviour of the financial institutions concerned.

The reports, when first mooted, were thought to be part of a process that would not result in the truth. That is how they were portrayed by many in opposition. Their presentation to the Minister for Finance 15 days ago, their consideration by the Cabinet, their publication for the public without any editing and their being discussed in the House are part of an open process. I would like there to be more openness towards that process, as there have been many snide remarks and much in-built cynicism that have led to a narrative that I do not believe to be true. My party is part of a Government which has been committed to getting to the bottom of the issues the reports describe.

The ongoing process will be informed by the publication of the reports and the debate in the Oireachtas. This is the first debate on them in the Oireachtas. The other House has not had the opportunity to have such a debate. We should be making a greater attempt to consider the issues at hand. The Oireachtas Joint Committee on Finance and the Public Service, of which several Senators and I are members, had an opportunity last Friday to discuss the content of the reports with Mr. Regling and Mr. Watson and today with Professor Honohan. These two meetings are part of a process that will lead us eventually to defining the terms of reference for a commission of inquiry and, I hope, the production of final reports as we try to put the events described in the existing reports behind us.

I heard some of the renewed criticisms being made. I accept some of them but not fully. There is no doubt that all the actors involved, particularly the State agencies, the Financial Regulator, the Central Bank and the Department of Finance, should be open to scrutiny. This scrutiny should be close and proper questions must be asked to seek the information needed to ensure clarity and public confidence in financial regulation and financial institutions.

There is a need for a process that is as public as possible. Professor Honohan advocated a model similar to the US Congressional model, whereby most inquiries are held in public but where elements are held in private. He gave his personal impression when he said that public elements of an inquiry are important in discovering the rationale and motivation, particularly with regard to policy issues, but they are not necessarily the best way to get to the truth. The important aspect of any inquiry assembled in future is that we seek the truth, identify and act on it and ensure it is exposed to full scrutiny. I am confident it can be done and that the appropriate balance between the public and private elements of a commission of inquiry can be achieved.

I asked Mr. Regling how he would define the balance between public and private at last Friday's meeting of the finance committee. I suggested the role of public bodies in particular, that is, the Department of Finance, the Financial Regulator and the Central Bank, given that they are public bodies and acting on behalf of the public, should be exposed to questioning and scrutiny in public session. I do not believe that is an impossible standard to attain. There are other issues relating to how the financial institutions have acted, to what extent there has been commercial security or secrecy behind whatever dealings exist, the minutes of board meetings and how they have acted, where the truth might be better ascertained in private session. Again, this appears to be a standard that applies not only in the US Congress model but also in the UK parliamentary model. I hope the terms of reference when agreed will get that balance right.

The questions about the Department of Finance are legitimate. There is no doubt that we have been well served by our public service. The Department of Finance has been primus inter pares of the Government Departments since the foundation of the State. However, the culture of the Department has informed the situation in which we now find ourselves. That it should be above or beyond particular scrutiny is not something I or my party can accept. The issue is finding the appropriate mechanism that would allow this to happen. The difficulty I envisage is that, under the Constitution and the Ministers and Secretaries Act, defining the difference between the political role of the Minister and the administrative role of the Department in asking the necessary questions is where we will have the hardest time framing terms of reference that will work.

However, as I said at today's meeting of the finance committee with Professor Honohan, the administrative role of the Department of Finance in itself helps to define ongoing and long-term policy. When there is a change of Government or a new element is added to the Government or there is a new direction in Government policy, one often sees the Department of Finance, quite rightly, seek to stymie new policy initiatives due to ongoing, long-standing policy which the Department has helped define. Given that such a culture exists and that personnel are informed by such a culture, I believe that is open to scrutiny. With regard to the balance of where advice is given to a Minister and the anonymity of such advice given by civil servants, these are proper standards to uphold.

In a democratic society there must be accountability, whether that is given by somebody in an administrative role, an appointed role or whether it is accepted and acted upon by somebody in a political role. If we have a process of inquiry that investigates only a certain proportion of what went wrong and how, it will be a flawed process. This will be difficult for many people to accept, particularly those who give good service in the public service but if we are to proceed from here and achieve public confidence, which has been badly dented by the events of the last two to three years, we must put those types of standards in place. We must have a level of inquiry which means that nobody is beyond reproach, everybody is accountable for their actions and the State learns from the experience.

These two reports are an excellent first step in helping us to get there. I am confident we will achieve it. It would be helpful if all Members of these Houses, in considering these reports, and particularly the actions of the finance committee help fill in the missing pieces. We must do so if we are to have financial institutions which the State will not again have to step in and rescue.