Sean Barrett (Independent) | Oireachtas source

I thank the Leader for proposing extra time for this debate. I also thank Senators D'Arcy, MacSharry and O'Keeffe. The Seanad was very well served in the inquiry. All Members across the political spectrum in the Dáil performed splendidly. They all thanked their assistants when they spoke in the Dáil last week. I add the names of Dr. Charles Larkin and Ms Ursula Ní Choill.

We had to do this. As the Minister of State has said, we cannot have €64 billion walking out of an Exchequer and nobody asking questions. If lobbying legislation comes up again for consideration, successful lobbying should be looked at and the right to ask questions should be reserved. The world which the lawyers invited us to inhabit in this regard, as referred to by Senator D'Arcy, is impossible and undermines our democracy. We cannot have a situation where €64 billion is spent by the Exchequer and we are not allowed to ask any questions. The lawyers are wrong on that. I will cite later some of the lawyers who have different views on the matter. Our democracy was undermined in the way they drew up rules regarding the conduct of the inquiry.

I will now turn to the matter of costs. There are huge numbers in negative equity with their mortgages and 230,000 children now live in poverty. The taxpayer was stung for €64 billion, although the net figure will be about half that. Davy Stockbrokers has estimated that €55 billion of shareholder value was wiped off the banks. UK banks lost €20 billion here. Two shadowy German banks, DEPFA and Saxony Land Bank probably lost another €50 billion. Patrick Honohan estimated that we have sustained €150 billion in terms of cumulative tax increases and public expenditure cuts. Some 300,000 people lost their jobs and hundreds of thousands emigrated. Of course we had to investigate that. It is why people sent us here.

Mr Justice Nicholas Kearns, on the occasion of his retirement from the High Court in January, said that a parliament has to have the right of inquiry into legitimate matters of public interest. We have to distinguish between an inquiry into policy and one into culpability. He said the courts had "virtually paralysed" the investigatory process where "accountability for matters of serious public concern is required". Former Chief Justice, Mr. Justice Keane, was quoted by Deputy Pat Rabbitte in his valedictory speech last week:

The power of the Oireachtas to conduct investigations is inherent in the legislative process. That power is broad. It encompasses inquiries concerning the administration of existing laws ... defects in our social, economic or political system for the purpose of enabling the Oireachtas to remedy them.

We cannot have €64 billion being spent in the manner in which it was with a guarantee that no questions will be asked.

I quoted Edmund Burke on an earlier occasion who said, "It is not what a lawyer tells me I may do; but what humanity, reason and justice tell me I ought to do". Oliver Goldsmith, whose statue is beside Burke outside Trinity College Dublin said, “Laws grind the poor and rich men rule the law". They certainly ruled the law in preventing Oireachtas inquiries. Matters which are well known in economics, such as regulatory capture, drawing up tables and the contrast between the pay of chief executives in Irish banks and the average industrial workers were taken out of our report by the lawyers. That has to be confronted.

I will now turn to the banks. There is, as Senator D'Arcy has said, so much information in the report on reckless lending on property, reckless reliance on wholesale borrowing and reckless reliance on foreign borrowing. The report also found that NAMA discovered that there were no proper records kept regarding loans. The rules were quite simple and they centred on issues such as loan to value, loan to income, sectoral concentration and borrower concentration. Banks lent to people and they did not know how much those people had already borrowed from other banks. Banking was reckless.

I welcome the appointment of Professor Philip Lane as the Governor of the Central Bank. He has the highest academic standards from Harvard and Trinity College Dublin. Banks had better get used to the fact that if they have a Government guarantee they will not be allowed to behave recklessly in future, whether they like it or not. The banks exceeded limits on sectoral concentration to 390% of own funds when the Central Bank's limit was 250%. The banks then told us they were comfortable with breaching those limits. I asked if the banks would approve a similar defence if one was found driving at 60 mph in a 30 mph zone. The comfort of banks cannot be assured.

The regulators did not do their jobs. They missed out on so many things going on around them, and the European regulators are included in that. They gave us a currency which was not prepared to deal with a tsunami of funds flowing into Irish banks. There was no exit mechanism and no bank regulation in this area until November 2014. In addition, we had lost the interest rate and the exchange rate as instruments of economic policy.

With regard to the refusal of Mr. Trichet to appear at the inquiry, one can see in the report that the liaison with the German, French and Italian Parliaments was far superior to what we were offered. In addition to not addressing the design faults in the euro currency - we should not have sleepwalked into that currency, Gordon Brown made a different decision - Mr. Trichet took the approach of the colonial governor of old. We celebrated William Butler Yeats recently. In "Under Ben Bulben" he says:

They were beaten into the clay

Through seven heroic centuries;

Cast your mind on other days

That we in coming days may be

Still the indomitable Irishry.

We will not allow colonial governors like Mr. Trichet to treat this Parliament as he did.

Reform of banks is necessary and we have that in play. Reform of the Department of Finance is necessary and we need to reform auditors. Auditors acting in the public interest are required to be audited with new audit legislation effective from June 2016. Bank auditors must be included in that. How the auditors missed so much has to be one of the mysteries of this crisis. The Irish Auditing and Accounting Supervisory Authority, IAASA, will be given responsibility for inspecting the quality of audit work performed by auditors of public interest entities from next June. I believe that banks are in that category.

The incoming Parliament has to be reformed to ensure we have the mechanisms to deal with this. There is so much information in thousands of documents and half a million pages. Some students from the next generation are in the Visitors Gallery today. We now have the means to ensure this never happens again. Deputy Ciarán Lynch and the inquiry investigation team deserve the applause and credit of everybody in the State for what they put together.