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Irish Banking Inquiry

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The Irish Government's convoluted, evasive plans for a banking inquiry are a bucket of whitewash and waste of time. They insult the electorate who will bear the cost (€40+ billion) of the crisis without ever seeing and hearing exactly why and how it happened.

We need is a new type of inquiry which is a mix of tribunal and commission and provides for membership by politicians and others. It should have subpoena and discovery powers, take evidence under oath, make findings, exclude lawyers, be open to public and televised, have an independent chairperson, engage expert support staff, hold private hearings by exception, have power to refer to ODCE/DPP/Gardai and so on. There are plenty of examples of this type of inquiry including the US's Financial Crisis Inquiry Commission which is examining a much more complex crisis than Ireland's and required to report by the year end.

A quick referendum would also facilitate other major inquiries in the future. It would make sense to delay the banking inquiry until the necessary changes could be introduced.

The Government needn't spend three months scoping its flawed approach to a banking inquiry. Instead, it should look at the terms of reference for the Financial Crisis Inquiry Commission. Most of them are relevant including role of regulator; monetary policy and availability of credit; accounting practices; tax incentives; capital requirements; credit rating; lending practices; concept of "too-big-to-fail"; corporate governance; compensation structures and levels; legal and regulatory structures; quality of due diligence; and fraud and abuse. To these, I'd add role of media and commentators; role of ministers and government departments; and relationships between politicians, developers and bankers.

Needed to say, a proper inquiry would not stop at September 2008 and should investigate the basis for the bank guarantees (relating to liabilities exceeding €400 billion), Nama (cost to taxpayer unknown but could exceed €10 billion), nationalisation of Anglo Irish Bank (€4 billion injected and another €6+ billion to follow) and provision of €7 billion in preference shares to Bank of Ireland and AIB (at a time when their combined market capitalisation was a fraction of this) with billions more to follow.

It is quite clear that the Government is doing its very best to frustrate the electorate's demand for an inquiry by doing as little as possible and working as slowly as possible. At the very least, the Opposition should withdraw all support for the proposed inquiry and undertake to set up a public inquiry when they win the next election.  

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This page contains a single entry by Brian published on January 24, 2010 9:15 AM.

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