Tuesday, 2 February 2016
Joint Committee of Inquiry into the Banking Crisis: Statements
I support the Minister of State's comments. The members of the inquiry were exhausted by the sheer volume of work. There was a tremendous effort on the part of the committee and the significance of this undertaking cannot be underestimated. The hard work and commitment of the Deputies and Senators involved must be properly recognised.
Tom Lyons wrote in The Sunday Business Postabout the people who participated and said the members of the inquiry were exhausted by the sheer volume of work, frustrated by legal roadblocks and that undoubtedly they showed real public service commitment. He asked whether the inquiry was established to prevent a crash happening again or to score political points.
On that point, I refer to Colm McCarthy's very brilliant article in the Sunday Independent. He said the Irish banking bubble had been a decade in the making when it began to deflate almost eight years ago.I recall sitting here in the Seanad and hearing this soft landing referred to repeatedly, and I was perplexed. What did a soft landing mean? What was the back-up that indicated there would be a soft landing?
Colm McCarthy makes the point, which we all know, that we had a very cautious and conservative banking system. He says that every bank went wallop and all required guarantees and capital injections. He states that not a single detailed report is available into the failings of even one of these banks. He further states: "All the official reports have interesting things to say about the banking system in the round and its spectacular collapse, but there has been nothing exploring the failures on a bank-by-bank basis". That is a simple statement. If there is no investigation into individual banks, as businesses, one by one, how do we know this cannot happen again?
Colm McCarthy goes on to state: "In other common law jurisdictions, the investigators, including parliamentary committees, have been free to explore the failings in financial institutions case-by-case. The report of the Banking Inquiry, as feared, has failed entirely on this score". There is no mystery about that gentleman making those succinct comments because he is an economist. It is his job to analyse the inquiry. He further states: "The report sheds no light on the manner in which each bank mismanaged liquidity and vaporised capital to the point where the State had to find €64bn in rescue funds for the Irish-owned banks alone". Our generation of Irish citizens will never forget that. That €64 billion will be imprinted on our minds forever.
The report does not draw any distinction between the performance of the various banks. As Colm McCarthy states: "There are no rosettes to be awarded to any Irish bank but some were clearly the victims of worse management than others. This continuing failure to explore what went wrong, bank by bank, ensures that lessons go unlearnt and the bank management and boards have been held publicly to account only in the aggregate". I was here the night of the bank guarantee. I recall going to the restaurant at about 4 a.m. to get a cup of coffee and speaking to one of the Department of Finance officials. I am not blaming the Department of Finance official because we were all led to believe that the situation was critical, and that we had to do it. This is my second last day in the Seanad - I will not be here again - but my personal opinion is that if Charles Haughey, Albert Reynolds or Bertie Ahern had been here, we would not have signed up to it. They would have kicked it to touch, and dealt with it, which would have allowed more time. We were rushed into it. I will never forget it in terms of the coldness around it, the fear of it and how we had to do it.
The other serious point is that the legal system put a constraint on the members of the inquiry in that they could not pinpoint any person as being to blame. That must change in terms of any future inquiry. The barristers and solicitors - the m'lords, as Colm McCarthy calls them - protected the reputations of those other actors. That was wrong, and we have to deal with that in the future.
I wish the Minister the best of luck in the election. I am sure he will win.