ECB declines to appear before first phase of banking inquiry

Oireachtas joint committee 'disappointed' at correspondence from European body

Committee chairman Ciarán Lynch with Fianna Fáil finance spokesman and inquiry member Michael McGrath. Photograph; Dara Mac Dónaill/The Irish Times

Committee chairman Ciarán Lynch with Fianna Fáil finance spokesman and inquiry member Michael McGrath. Photograph; Dara Mac Dónaill/The Irish Times

 

The European Central Bank has declined to appear before the first phase of the banking inquiry, which opens tomorrow.

The bank wrote to the Joint Committee of Inquiry into the Banking Crisis said on Tuesday night it had received correspondence from the ECB indicating that it will not be appearing before the committee as requested.

“While the ECB is outside the Irish jurisdiction and beyond the committee’s powers of compellability, the committee does have the expectation that it will assist us in our work,” committee chairman and Labour TD Ciarán Lynch said in a statement.”

He said the response was “ disappointing” and hewould be writing to the ECB to ask it to “review” its decision.

The inquiry will begin public sessions at Leinster House on Wednesday with the evidence of Finnish academic and finance expert Peter Nyberg, author of a key 2011 report on the country’s financial collapse.

Mr Lynch said on Tuesday he had always said the inquiry was “not about individuals or personalities but about the information that the ECB would make available to the committee to assist us in our work”.

“We still anticipate that the ECB will assist the committee in providing any information we may request.”

In the letter, ECB president Mario Draghi said the institution "does not see itself in a position to participate in inquiries conducted by national parliaments and will therefore not appoint a dedicated contact person".

Kevin Cardiff, the senior civil servant who played a pivotal role in the Department of Finance at the height of the banking crisis, says he is looking forward to giving evidence to the Oireachtas banking inquiry.

“I’ve been waiting for years to get a chance to speak in an organised fashion, so as long as it is open and fair, I’m happy,” said Mr Cardiff who is now a member of the European Court of Auditors.

He was speaking during an appearance before the Oireachtas European Affairs committee in his new role as Ireland’s representative at the Court of Auditors.

Two 3½-hour sessions will be held this week and up to 30 witnesses are expected to appear between January and March in the first phase of the two-part inquiry.

During the first “context phase” of the inquiry, the 11- member committee will meet experts to “get an in-depth understanding of different aspects of the banking crisis.

 

Information-gathering

After the information-gathering in the initial stage, the nexus phase will start in April when the committee will focus on three areas – banking, regulatory and crisis-management systems. Institutions and individuals who had roles during the crisis will be interviewed.

 

The committee hearings will run from 9.30am to 1pm daily. When the inquiry resumes in January it is expected to sit in public session most Wednesdays and Thursdays.

Fianna Fáil finance spokesman and inquiry member Michael McGrath said yesterday the European Central Bank had not yet responded to inquiries, which he said was a “concern” as it was an important player in the wider story.

He said the inquiry faced significant legal constraints but could serve as a “litmus test” of the capacity of politicians to show they could be independent and objective and put forward reasonable and robust questions to witnesses.

Inquiry members had held about 15 meetings which were largely completed without serious divisions or politicisation occurring in the group, Mr McGrath added.

“I think it would have been far better if we had a judicial-led Leveson-style inquiry which would have removed many of the limitations this inquiry is now going to be subject to, but we proceed in good faith.”

Mr McGrath said he was not expecting “earth-shattering conclusions” as he did not feel the inquiry would be allowed to reach them but he hoped the public could hear a full account from all of the main actors in the banking crisis in an exercise of democratic accountability.

 

Public forum

The opportunity to have “a full account in a public forum of what happened in our banks, the response of the regulatory system, the impact of any government decisions and many other issues” should be taken.

 

He said the inquiry would be a success if it finishes its work before the next general election and is not stopped in its tracks by a legal challenge.

The early hearings would be a “form of shadowboxing in anticipation of the real event” which he hoped would start next spring when bankers, politicians and regulatory officials appeared, he added.

Mr McGrath said it would be hard for the inquiry to make findings of fact against anybody unless they were completely uncontested, which was unlikely to happen.