Will the banking inquiry get to the bottom of the €64bn mess?

After many long months of delay, the parliamentary banking inquiry has moved a step closer with the decision by Taoiseach Enda Kenny and Tánaiste Eamon Gilmore to propose Labour TD Ciarán Lynch to chair the investigation.

The immediate catalyst was the conclusion of the first Anglo Irish Bank trial. Although these proceedings ended with two convictions, no one will go to prison and Judge Martin Nolan raised serious concern about the abundant failings of the financial regulator.

All of that merely adds to the unsatisfactory air of unfinished business around the banking debacle, the fateful guarantee of September 2008 and the devastation that followed in its wake. Hardly anyone has been held to account for an appalling litany of greed, error and miscalculation, which left current and future generations of taxpayers with a €64 billion rescue bill and plunged the State into a humiliating international bailout.

Yet in spite of the speed with which the Coalition has now moved, there is no prospect of early public hearings into what went on inside Government Buildings and within the walls of supposedly solid banks and supposedly vigilant regulators. On the contrary. While a motion to establish the inquiry will be laid before the Oireachtas next Tuesday, formal terms of reference remain to be decided and copious preparatory work must still be undertaken.

Witnesses will not be heard from in public session until early next year. This will be the meat of the inquiry, providing an opportunity to hear from key protagonists. They will be asked to explain, in their own voice, the actions they took. The prospect of televised hearings is tantalising to say the least, even if it fills witnesses with apprehension and discomfort.

At the same time, public hearings in a formal setting are unlikely to capture the unguarded machismo of the infamous Anglo tapes. We know in broad terms what happened. But the minutiae of the trial proceedings – even without hearing protagonists’ voices – added intriguing new dimensions to the sum of public knowledge. The net point is that there is still much to learn about the debacle, not least in terms of the rationale for costly actions taken at the highest level in politics, banking and regulation.

We can expect to hear from then taoiseach Brian Cowen, former financial regulator Pat Neary, retired Central Bank governor John Hurley and the luminaries who then led each of the main banks and building societies. Well-paid then and well-pensioned now, all have since disappeared from public view.

There is always the possibility of a legal challenge to the inquiry, which seems to be an inevitability in the Irish context.

Furthermore, there is no little risk of unseemly politicking. Kenny’s own remarks yesterday – in which he referred to “catastrophic consequences of the light-touch regulation introduced by Fianna Fáil over the years” – point to high potential for friction in the inquiry chamber.

It is as well to point out that the inquiry is precluded from making adverse findings of fact. Only time will tell if the proceedings amount to a political show trial – albeit without verdicts – or something more nuanced than that.

It will fall to Lynch in the first instance to keep a steady hand on the inquiry, and to avoid the kind of mission creep which saw judicial tribunals continue for years without restraint as to cost or duration.

While the composition of his committee remains to be decided, there can be no doubt that it will reflect an in-built majority of the Coalition parties in both Dáil and Seanad.