Let's own up to our part in the burst bubble
Bankers are not the only ones at fault for that culture of atavistic greed that drove us to and over the precipice, writes VINCENT BROWNE
PATRICK HONOHAN said last Thursday the Irish banking crisis was “the most expensive in banking history”. The scale of the economic downturn is by far the worst in the developed world.
We are in danger of losing forever to emigration a generation of young, highly qualified people. What has happened is a major calamity for this society and a great many of us are to blame. Perhaps it is time we owned up.
The bankers were maybe the most reckless, but remember who was on the boards of the banks when that recklessness took root and took off. Take the AIB board in 2007 and note how embedded many of these were in the elite institutions of society. The chairman was Dermot Gleeson, one of the foremost barristers of his time, former attorney general, member of the Royal Irish Academy and director of the Gate Theatre. Also there were: Adrian Burke, former president of the Institute of Chartered Accountants in Ireland, Scotland, England and Wales and vice-chairman of the Institute of European Affairs; Kieran Crowley, a member of the government-appointed advisory forum on financial legislation (some irony there!) and former chairman of the Small Firms Association; Anne Maher, former chief executive of the Pensions Board; Seán O’Driscoll, chief executive of Glen Dimplex and recipient of an honorary OBE for his contribution to British industry (more irony); and Bernard Somers, a director of Independent News Media and of DCC.
There were similar plethoras of “distinguished” business and professional people on the boards of Bank of Ireland and Anglo Irish Bank. How did these elites manage to destroy not just their own banks but the banking system as a whole and even the country? Was it because they were so distinguished that they could achieve so much?
They were aided and abetted of course primarily by the accountancy profession. All of the major accountancy groups were involved as auditors to the banks. They had a statutory duty to examine the state of the banks and to convey to the shareholders of the banks a true and accurate picture of what was happening. They were paid millions of shareholders’ money to do this job professionally and diligently.
None of them were either diligent or professional. Not one of them blew the whistle on what was going on in the banks and only one of them is now under investigation for their spectacular incompetence.
There were other accessories, among them being the solicitors’ practices, again all the big ones, and boy do we have big solicitors’ practices, charging big solicitors’ fees. Not one of them, as far as we know, advised there was anything questionable going on in the banks.
Even in Anglo Irish Bank, when, manifestly, there was evidence of possible criminality in the fixing of the share price by the concealment of the Seán Quinn share disposal, there is no evidence that any of the lawyers involved advised that what was done was a criminal offence, or could be so understood.
Look at what has happened with the health service during the period of the madness. Billions poured into the service, some improvement in access and in the quality of treatment, but who were the major beneficiaries? The professionals, primarily the consultants. Medical and dental fees here are multiples of what they are elsewhere, and hordes of people are travelling to Budapest for dental treatment because of the rip-off practices of dental treatment in Ireland.
Of course the political class is to blame and massively so. The panic decision to give a blanket guarantee to the banks on September 29th, 2008, will be remembered as the greatest piece of social vandalism here, probably since Cromwell. What is so staggering about that is that they were advised from at least the previous January that a crisis was looming, they had nine months to prepare options and to take advice and then they did the worst thing possible, in a panicked deference to the lords of high finance.
And that same crowd had so mismanaged the country’s fiscal affairs that when the banking crisis broke the State was found to be broke as well.
Yes, and there are the regulators, the Central Bank, the Department of Finance, the NTMA and the broader public service too. But that is not all.
We in the media did our bit too in the destruction of Ireland. With only a few exceptions, we did not see the crisis coming and we gave no warnings. Some of us did not like how Tiger Ireland was developing, with its extravagance and inequalities and cruelties, but we did not see the underlying instability of it all.
And then elements of the media roared on the property madness to make millions and millions from the advertising that the property bubble generated. And many in the media benefited from that, through higher fees and salaries.
The schools, the universities, the homes of Ireland and the media again all created that culture of atavistic greed that drove us to and over the precipice.
Yes, it’s time we owned up.