Shane Ross (Independent)

This is a different type of banking debate because of the publication of these reports, which I welcome. I also regret to some extent that the reports almost inevitably are used in a kind of blame game between the Government and the Opposition. I do not refer to the Minister of State's contribution, which was not so much like that. Inevitably, however, what happens here is that Members pick the parts of such reports that are good for them. Members tend to lose sight of the facts, context and balance contained in such reports. It is a pity that these reports, which I welcome, have been used for some quite sophisticated spinning. It is a pity that the Government sat on them for ten days as I cannot discern any reason this was necessary, except to digest them and then use them for its own purposes. Perhaps the Government feared the reports more than it needed to and therefore wished to gain a presentational advantage over the Opposition, which of course intended to use them against the Government.

I attended the committee meetings, both today and last Friday, and the question everyone is taking from this report is who is to blame. This has moved on to not only asking who is to blame but whether the Government is to blame and the debate now is centred on this question and on the Taoiseach's position. I acknowledge this is an important element of what must be debated.

Because the Government seized the report for ten days and then spun it so strongly last Wednesday by taking all three radio channels to put the Taoiseach's point of view, we tend to lose sight of the fact that if we are playing the blame game, the principal culprits are the bankers. There is no doubt whatsoever about that. The ultimate responsibility for all that went wrong certainly does reside with the Government but in the past week I have noticed that the emphasis has moved very strongly into who gets blamed in the political arena and the bankers have very cleverly kept their heads down. One has not heard a banker talking about this report at all on the media and they have left people in Leinster House to squabble among themselves about whether the Government or the Taoiseach is to blame. Those are important matters, but they tend to lose sight of the fact that the principal culprits probably lie elsewhere. That is not to remove responsibility from the Government because it has ultimate responsibility but when we are debating the matter we should refocus to some extent on those people who were the principal players in this unpleasant drama which has been going on for many years. In that sense, the reports need a certain amount of decoding.

In the past two days I was very struck by the nimble way both Professor Honohan and Herr Regling and his colleague, Mr. Watson, managed to duck to a large extent the sort of political minefields which were being set for them by every question posed. That was an important element in what was going on. However, what they did say goes against me. They would disagree with some of the things I have said. When they were attributing blame, they said that looking backwards, most of it was home grown, some of it was global and then they distributed the home grown blame among the bankers, regulators and the Government.

However, it is only fair to say that they seem to have drawn a line between what happened prior to approximately 30 September 2008 and what happened after that date. Prior to that date they said that everything that was done by the major players, namely, the Government, the regulator and the banks was wrong. It was a mistake, a conspiracy. All sorts of other pejorative terms were used. However, they said the Government's crisis management was carried out rather well. That is really saying the Government created a complete and utter mess but when it came to dealing with the crisis it was repaired reasonably well in the emergency or fire brigade sense. Both Professor Honohan and Messrs. Regling and Watson were fairly approving of areas such as NAMA which I personally do not feel committed to at all, in fact I am fairly critical of it. They were fairly approving of the bank guarantee and they did say things about what has happened since then which would be unpalatable to the Opposition and music to the ears of the Government. They said, and it is only fair to acknowledge it, that the management of the economy since that date has been the best in Europe. So there is some cheer for the Government out of these reports.

I hasten to add a word of warning; just because they say it does not mean it is right. There is the most extraordinary acceptance of what those three gentlemen say, which is quite revealing. Everyone who has read these reports present it as though they are the Bible. Everyone debating them in this House, the committee and in the other House — from what I have heard today — are saying Professor Honohan says this, that is it. It is now Canon Law or whatever else we used to believe in in this country. They are saying when Regling and Watson say this, that is it, they are right. If they say you are to blame then you are to blame. If they say this is the way forward then it is therefore the way forward.

I have found an extraordinary acceptance of what they say and a reluctance to challenge these three gentlemen which is very odd because there are elements in the reports and in what they said which are pretty staggering. Several politicians who were not necessarily trying to score political points, and rarely try to do so, asked them about the Department of Finance. Deputy Burton from the Labour Party rather colourfully described them as the ghosts in the report. When they were asked about the Department of Finance all three of them seemed to run for cover. That is quite odd because most people's understanding of the Department of Finance is that it is the most powerful Department in the State, that in many cases it is far more powerful than the Minister for Finance not just because it is permanent but because it is the fount of all the information and that it has overall statutory and supervisory powers over the regulator. It has a major influence on the Minister and to a large extent it writes the budgets and the financial laws of this country and, traditionally, spins its own agenda in a way which could be interpreted as dangerous but is certainly potent. For those two reports to say they are not going to tackle that particular problem and for the gentlemen when faced with a certain amount of questioning about it not to be willing to take on the Department of Finance is somewhat alarming.

The Department of Finance is coming under increasing scrutiny. Certain people who are ex-employees are now beginning to write things about it. The Department needs to be challenged, questioned, interrogated and investigated with exactly the same rigour as has been applied to the banks, the bankers, the regulators and the politicians. Throughout this entire saga it became evident how the individual mandarins and civil servants, their way of promotion, the influence they have, how they operate and interact with the Central Bank is a dark and mysterious area. I was rather surprised this morning when Professor Honohan just as an aside said the Central Bank communicates a bit with the Department of Finance but it is independent of it. He said, by the way, that if the Department wants to change a bit in the Central Bank's annual report that he would not make an issue of it. I did not know and I do not know whether the Minister knew that the Department of Finance has an input into the Central Bank's annual report. Where else does it have that sort of influence on other areas of the State that it can control information in that way? I do not say it is good or bad, but we ought to know about it and it ought to be investigated. Those individuals ought to have warned what was going on earlier.

It is not just a matter of economists, which is always the emphasis of what people say, namely, that there are no economists in the Department and no experts. There are powerful people in the Department who have influence on the Central Bank and the regulator. The Secretary General of the Department of Finance always became Governor of the Central Bank up to the appointment of Professor Honohan. That is at least a symbol of the connection between them and how they are joined at the hip. That area must be subject to the same investigation. The Department of Finance was not mentioned among the terms of reference for the next report. Neither did Regling and Watson list it among the matters that should be subject to further investigation. What we need to find out is whether there are hidden hands controlling or allowing things to happen which we do not know about. The responsibility of that Department is equally important to the other organisations we found to be culpable.

Senator Quinn attended today's meeting and he said something which was similar to an interesting point mentioned by Professor Honohan. He should let me know if I am misquoting him. Following these reports, he referred to the importance of questioning the need for the next report that is due to be carried out. As the Minister of State, Deputy Mansergh, and everyone else in this House is aware, these two reports were meant to be preliminary reports.