The banking reports by Prof Patrick Honohan and the international experts shattered “a number of myths” regarding the Government’s response to the crisis, Taoiseach Brian Cowen has told a news conference today.
But he conceded that the reports made clear that, along with mistakes by banks and regulators, "mistakes were also made by successive Governments, some of which reflected fundamental errors in projections by the Central Bank, the IMF, the OECD and others".
He told reporters at Government Buildings: "I believe the reports strongly vindicate the approach taken by this Government in dealing with the banking crisis. The Governor's report, demolishes the contention that a widespread guarantee was not necessary and highlights the enormous damage which would have resulted if a bank was let fail."
He added that the Honohan Report, "finds that Anglo Irish Bank was systemically important as this Government has contended. Opposition parties have strongly argued that it was not a systemic institution. Governor Honohan confirms that a disorderly failure of that bank would have brought down the whole banking system".
Mr Cowen said that, "As a former Minister for Finance, I want to respond to the criticisms of fiscal policy in the report and especially where this relates to the role of property based tax incentives.
"I want to emphasise that prior to the crisis, the Government took action to reduce the vulnerabilities of the banking sector to the property market, although I fully accept that, in hindsight, it was not sufficient."
Minister for Finance Brian Lenihan said it was important to bear in mind that the two reports were prepared as "scoping exercises for a banking inquiry".
"The intention of the Government is to furnish the draft terms of reference to the Oireachtas Committee on Finance and the Public Service so that we can have their views on the terms of reference before establishing the commission of inquiry by the end of the month."
It was the Government's intention to bring the terms of reference before the Houses of the Oireachtas and have them approved before the end of June.
There would be "a six-month time-limit" on the work of the Commission. The draft terms of reference related to January 1st 2003 to September 28th, 2008, when the bank guarantee was introduced.
"These terms of reference can be looked at by the Oireachtas Committee. They will have to come back to the Government quickly with their views," he said.
Mr Regling and Mr Watson were meeting the Committee on Friday: "And I know that next week, arrangements are being made for the Governor to discuss matters with the Committee."
Green Party Minister for Communications, Energy and Natural Resources, Eamon Ryan said the reports showed "a systemic failure in our political system, in our regulatory system, in our banking system that has cost us dear".
"The Green Party wasn't in government for the long period in which these failings developed but we are responsible for the actions of this government and the response to try and get us out of the difficult circumstances that we find ourselves in."