Inquiring into the crisis
Ireland’s domestic banking collapse has, as the Dáil Public Accounts Committee pointed out, created the greatest challenge to the State since its foundation. Indeed, the Governor of the Central Bank, Patrick Honohan, has described it as one of the costliest banking crises in history. Yet five years after the onset of the crisis, which has already cost the State an estimated €64 billion, the public know far too little about what happened, and why, from the key figures in the great banking failure
A parliamentary inquiry can, belatedly, now secure adequate public accountability for this financial debacle: from the banks, their management and boards; from the Central Bank and financial regulator in relation to their supervisory role; from the accountancy firms who audited the books of the banks. And not least from those in the Department of Finance and Government who presided passively over a property boom, bubble and bust, culminating in the controversial bank guarantee decision.
The need for a far-reaching inquiry is clear. The difficulty in securing one should not, however, be underestimated. Taoiseach Enda Kenny has said he hopes the parliamentary inquiry can be conducted prudently and judiciously against the background of imminent criminal trials of key Anglo Irish Bank executives, which are due to start in January. But to ensure the inquiry does not prejudice their rights to a fair trial, any discussion of Anglo Irish Bank at the parliamentary inquiry may have to await the outcome of those pro. Government Ministers remain mindful of how in 2000, a High Court judge found that pre-trial comments made by the then Tánaiste, Mary Harney, had prejudiced former Taoiseach, Charles Haughey’s trial on charges of obstructing the McCracken tribunal. His trial was postponed indefinitely.
The other constraint facing a banking inquiry is that imposed by the Abbeylara judgment – which the Government sought and failed to reverse in a referendum vote in 2011. The legal ruling means that Oireachtas inquiries cannot, albeit with some exceptions, make findings of fact adverse to anyone’s good name. Despite these limitations, there is no reason the parliamentary inquiry cannot be a success.
What will determine the inquiry’s success will be the skill and expertise the inquiry team can deploy in dealing with matters of some financial complexity, overcoming considerable legal hurdles, and in handling the issue of Cabinet confidentiality – should that arise. There is scope for a full investigation of the banking failure, and for ensuring that those in key positions – whether in the banks, the public service, or government – are made accountable for their actions. The inquiry can make findings on the performance of the banks and on other public bodies, and also make policy and legislative recommendations to try and ensure lessons are learned, and that history is not repeated.