Government inquiry into banking crisis planned for autumn

Ministers reserve the option of new referendum to toughen the powers of the inquiry

The Government is reverting to its original plan for a parliamentary banking inquiry in the autumn but it will hold in reserve the option of a new referendum to toughen the powers of the inquiry.

After two Cabinet discussions in the past fortnight, Ministers are now moving away from the option of running such a referendum on the same day in October as the poll to scrap the Seanad.

This option has been in play since the Anglo tapes disclosures but the absence of any formal proposal for tomorrow’s Cabinet meeting is a clear sign there will be no early move to go back to the people.

Draft laws to set up an inquiry which will not have the power to make findings of fact will be discussed by the Seanad tomorrow in anticipation of final enactment later this month, before the summer recess.


Preparations for the inquiry come amid mounting pressure on former Anglo Irish Bank chief David Drumm to reveal what he knows about the debacle. He issued a statement from the US yesterday saying he would no longer allow himself "to be made the scapegoat by politicians, politically connected former bankers and politically protected senior public servants who don't want their role in the crisis to be highlighted".

His statement followed two media interviews last week, prompting the spokesman for Tánaiste Eamon Gilmore to call on Mr Drumm to attend the inquiry. "Interviews given to chosen interviewers are all very well but what we need to see is that Mr Drumm appears before any inquiry which is set up and account for his stewardship of Anglo and everything that followed from that," the Tánaiste's spokesman said.

Asked by email whether he would attend or whether he had any response for Mr Gilmore, Mr Drumm responded: “How can I comment in relation to an inquiry that has not yet been established and the terms of which are still unknown?”

The latest Anglo tapes, published yesterday by the Sunday Independent, reveal conversations between Anglo executives and senior officials from the Central Bank of Ireland and the Department of Finance between September 2008, when the guarantee was granted, and the following December.

The transcripts show that Con Horan, then responsible for supervising Anglo in the Financial Regulator, expressed concern to the bank about its fundraising activities in the month after the guarantee.

"It has to be done in a way that doesn't make sure that we kill the goose that laid the golden egg here," Mr Horan told John Bowe, Anglo's then head of treasury.

Mr Horan stressed it was important that “everybody acts ethically, in a proper manner with this guarantee”.

Interviewed yesterday by RTÉ, Central Bank governor Patrick Honohan said the Central Bank "did listen" to the Anglo tapes and "took transcripts and passed that material to the guards".

The governor said it might shortly be possible to identify the credit institutions referred to in his May 2010 report to Government about the banking crisis.

EU and Irish law prevented Mr Honohan from identifying those institutions at the time.

However, he suggested that, “in due course, maybe not so long, we will be able to say this stuff is not so confidential any more and [we] can put [the] names out”.

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times