THE report of the Oireachtas Joint Committee of Inquiry into the Banking Crisis, published this week, will have as much effect on the upcoming general election as the Central Bank had eight years ago on regulating the Irish banks as they raced towards collapse before having to be bailed out by the Irish taxpayer. The report has the same ‘light touch’ style as a former Financial Regulator Patrick Neary operated, when failing to ‘intervene decisively,’ and nobody is going to be held properly accountable for what happened as the Inquiry could not make findings of fact against individuals.
One of the dissenting voices in the Committee, Socialist Party TD Joe Higgins, who refused to sign off on the final report, has published his own set of conclusions based on the evidence given to the Banking Inquiry and these are damning of the establishment parties, Fianna Fáil, Fine Gael and the Labour Party. Whether you like or loathe him and his politics, Mr Higgins – who is not seeking re-election to the Dáil – has a point about the way the final report is being ‘spun.’
When certain aspects of the report were leaked in advance towards the end of last week, Joe Higgins stated that this carried ‘the hallmark of some supporters of the report attempting to shape a narrative around the findings they would prefer to have highlighted in advance of the official publication on Wednesday.’ No doubt, his version will be aimed at holing the establishment parties below the waterline for allowing the Irish banks and the European Central Bank (ECB) to hold the country to ransom the way they did and at such a huge cost to the Irish taxpayer, which is still being paid off and will be for many years to come.
This Inquiry had been fraught with controversy even before it got under way. Respected independent TD Stephen Donnelly, who since co-founded the Social Democrats, resigned from the Oireachtas Committee when the government increased the numbers on it from nine to eleven in order to give them a majority of members. He declared that ‘we should be setting up an Oireachtas inquiry into the banking collapse, but instead we appear to be setting up a Fine Gael-Labour inquiry into Fianna Fáil.’
This Inquiry should have taken place earlier in its term of office, but the government seemed to think that by delaying it until its final year and then issuing its report a month ahead of the general election, it would cause maximum harm to Fianna Fáil’s attempts to bury the past and rehabilitate themselves with the electorate. The findings of the report concerning economic policy and failure to regulate the banks properly will, no doubt, impact on Fianna Fáil to some extent in the ballot boxes, but Fine Gael and Labour by and large went along with what the last few governments were doing and were not heard to sound any alarm bells very loudly.
The conclusions of the Banking Inquiry broadly reflect this and, as regards, the Fianna Fáil-led government being backed into a corner by the banks the night the blanket guarantee was given, it is easy at this remove to be wise after the event, especially given the facts about the banks that subsequently emerged but that were not known to the government at the time. The ECB let Ireland take the hit for the rest of Europe by refusing to countenance ‘burning’ the banks’ bondholders and placing the entire burden of the blanket bank guarantee on Irish taxpayers, leading to the country having to enter a bail-out programme two years later.
One of the main reasons that the Banking Inquiry report has ended up as a damp squib is that it ran out of steam last summer when people just got tired of the procession of – what we described here at the time – as bankers, financial regulators, civil servants, politicians, etc coming in, answering questions, making their excuses for the way they handled things on their watch, apologising for the mess that was made – which they all claimed was not really their fault – and then disappearing below the radar again. Most of them were heading back to enjoying a comfortable retirement on big fat pensions.
We described the rather predictable format as ‘set-piece nonsense,’ which did not end up yielding any more than most people already knew. Then, there was the pre-Christmas controversy over the draft report, which had to be watered down, and which saw Joe Higgins, along with Sinn Féin’s Pearse Doherty, refusing to sign off on the final one.
The Banking Inquiry cost the Irish taxpayer another €5m-plus on top of the €40b the bailing out of the banks cost, so was it worth it? Hardly, given its lack of teeth.