After working through over 40,000 documents and hearing 400 hours of evidence the banking inquiry released its report yesterday and the Irish public was told nothing it didn’t already know: A small elite cabal of individuals and institutions bankrupted this country in the pursuit of personal enrichment causing desperate economic hardship for hundreds of thousands of their fellow citizens.
Two of the 11 members of the Oireachtas Banking Inquiry have rubbished the investigation and refuse to support it. The two, Joe Higgins and Pearse Doherty were scathing in their verdicts with Sinn Fein Finance spokesman Doherty calling it a “disservice to the Irish people” while Joe Higgins issued his own minority report just hours before the inquiry was published.
Mr Higgins’ report criticises the Fianna Fáil-led government elected in 2007 for serving the interests of bankers and developers at the expense of ordinary people.
He found Taoiseach Enda Kenny must also take responsibility for his role as a “silent non-opposition” during the economic crash.
“Extreme profiteering driven by corporate greed drove the property bubble and caused the crash. The bubble governments of Bertie Ahern served the interests of bankers and developers, not those of ordinary people.
“The political leaders of the Fianna Fáil-Progressive Democrat government from 1997-2007 relentlessly pushed the deregulation in the financial services that resulted in this competitive race to the bottom in banking standards as major banks vied for profit.”
He added that the regulator must take “full measure of responsibility” but that the political establishment should not be allowed to scapegoat.
Pearse Doherty said it is a series of quotes from senior bankers, politicians and civil servants without any analysis or insight.
He said the defining narrative of the report is the rationalisation of what happened by the key players.
“It was never the intention that you would take verbatim what people said before the inquiry.”
Mr Doherty said he did not believe any member of the committee would refer to this report as a good summary of the public hearings. It was incoherent and dysfunctional because of the delay in establishing the committee and the rush to have it complete before the general election.
The other members however defended the report, insisting it was the best they could have produced under the tight time constraints and the legal restrictions.
They found that the banks became increasingly involved in risky commercial lending due to competition for profits, government tax cuts fuelled this property market and the Central Bank and regulators failed to use their powers to regulate.
The report also states the ECB effectively forced the government into a bailout and threatened to cut off emergency lending assistance if senior bondholders were threatened.
Committee Chairman Ciaran Lynch, who said he was proud of the report:
“The financial regulator adopted a ‘light touch’ and non-intrusive approach to regulation. The Central Bank underestimated the risks to the Irish financial system. The Committee found that both institutions had the powers to intervene, but neither did so decisively.”
“The crisis in the banks was directly caused by decisions of bank boards, managers and advisors to pursue risky business practices, either to protect their market share or to grow their business and profits,” added Mr Lynch.
As a result, the inquiry found that developers became “heavily reliant on bank debt to fund their developments.”
Another member of the inquiry, Fianna Fáil TD Michael McGrath said it could have only ever scratched the surface of the crash due to court cases.
“It was deeply frustrating for us as members not to have delved into the Anglo story in far more detail, and those who were in charge of that institution could not come before us and give an account of their stewardship of the bank.”