Brian Ó Domhnaill (Fianna Fail) | Oireachtas source

I welcome the Minister of State at the Department of the Taoiseach, Deputy Paul Kehoe.
Fianna Fáil supports the establishment of the banking inquiry in its general format. However, a parliamentary inquiry on its own does not go far enough and will be precluded from fully investigating what happened during the collapse of the banking sector in Ireland. The people will not be satisfied with a parliamentary inquiry which, in theory, will not have adequate teeth to fully investigate what happened. Questions will be asked if the banking inquiry will follow on a report published in March 2011. We now have a committee of inquiry, but it is made up of Members of the Oireachtas. The question has to be asked whether the people will accept politicians on a partisan basis, under the party Whip system, making decisions in an investigation into what actually happened. Questions are already being asked about the partisan nature of the committee. It would be much better if the Oireachtas adopted a more hands-off approach in such an inquiry and if it was headed up by a High Court judge and given the necessary resources. It would cost nothing more to go down that road and at least nobody would be able to say such an inquiry was partisan in nature. Time will show that this was the wrong type of inquiry. One only has to look at the Abbeylara inquiry into the death of John Carthy and what the Supreme Court in its ruling found that it had many shortcomings. I would hate to think such an important issue as the collapse of the banking sector and the knock-on effect on the economy would be dealt with in a half-hearted way.
Let us look at Bank of Ireland. Over a period of 200 years up to 1999 it lent about €100 billion, but in the following ten years it lent the same amount. There are questions that need to be asked. As my time is limited, I want to touch on some of them.
The terms of reference of the inquiry need to be established. The parties in government will state the Government at the time should have called a halt. Yes, that may be the case. However, during the debate in both Houses of the Oireachtas in 2003 on the Central Bank and Financial Services Authority Act 2004 not one political party raised any question about the financial institutions or the banks. In fact, the then Opposition spokesperson, Deputy Richard Bruton, now Minister for Jobs, Enterprise and Innovation, said the Irish Financial Services Regulatory Authority could not be expected to ride shotgun with every bank and that banks had deep pockets to resource various wheezes. In the long run only self-assessment and self-regulation would work, not trying to catch people out.That is what those now in government said at the time.
To fully establish what went wrong, a number of key issues need to be investigated and included in the terms of reference which I understand are being established by the Committee on Procedure and Privileges. The Department of Finance, the Central Bank, the Financial Regulator, the Economic and Social Research Institute, the European Commission, the European Central Bank, the International Monetary Fund and the Organisation for Economic Co-operation and Development failed to predict the onset of the financial crisis and their roles need to be fully investigated. The processes by which the financial institutions individually became involved in the crisis and their auditing systems need to be investigated because, clearly, they were broken.
The role of the ECB in the lead-up to the financial crisis and its culpability in assessing it by its cheap money policy needs to be queried. What led to the bank guarantee? What pressure was brought to bear on the ECB in respect of the bank guarantee and what was its role in insisting on none of the Irish banks failing?
The events leading up to nationalisation of Anglo Irish Bank in January 2009 needs to be investigated. The decision to establish NAMA and its consequences, the events leading up to the bailout in 2010 and the role the European Central Bank played in this regard must also be investigated. The attempts of the Government to get the ECB to agree to burden sharing, the reasons the ECB did not play ball in that regard and the decision to liquidise the Irish Bank Resolution Corporation and its consequences are some of the issues that must be investigated. If the inquiry is refined and narrow and simply covers the bank guarantee, we will only be letting the banks and bankers off the hook. It needs to have teeth. Given that we are having a parliamentary inquiry, these are some of the issues that need to be fully investigated.