ThE PUBLIC is greatly concerned to ensure that the collapse of the domestic banking system is adequately investigated. When questioned on this issue in the latest Irish Times/Ipsos MRBI poll, nine out of ten respondents agreed that an official inquiry should be held and only 6 per cent disagreed. The survey, however, was completed before the Government had outlined the terms of its proposed inquiry. If those surveyed knew the inquiry would be conducted in private, andwithout meaningful participation by the Oireachtas,their reaction might have been different.
Parliament will have a limited consultative role throughout the multi-stage investigation. At the outset, an Oireachtas committee may make suggestions to Central Bank governor Patrick Honohan and to an independent expert before both prepare preliminary reports on aspects of the banking collapse. The Oireachtas can later discuss their findings which will influence the terms of reference of the commission of investigation – to be chaired by a “recognised expert or experts of high standing and reputation”. Again, the Oireachtas can debate the Commission’s report, when completed. The Government’s marginalisation of the Oireachtas represents a repudiation of parliament’s rightful role to investigate what Minister for Finance Brian Lenihan has correctly described as “the worst financial crisis this country has ever experienced”.
The Oireachtas has been sidelined, reduced to the status of passive and powerless observer of an investigation process conducted in secret by experts - some of whom face a potential conflict of interest. Prof Honohan commendably was among the first to call for a banking inquiry. But he hardly envisaged the remit of that inquiry would oblige him, as the new governor, to investigate the Central Bank’s own past failures of financial oversight. That is hardly right.
The public is entitled to secure proper accountability from those – bankers, regulators and Government Ministers – who have contributed most to this banking crisis. After all the public, via the Government guarantee, has underwritten bank liabilities amounting to €440 billion. They have financed the recapitalisation of the banks to the tune of some €11 billion to date and supported the creation of Nama which helps ensure the solvency and survival of those banks. And yet, many of these latter aspects of the banking crisis are not to be investigated since events occurring after September 2008 are excluded.
Former taoiseach Garret FitzGerald makes an interesting contribution to this debate in his column today.
The Government’s proposal for a private inquiry is a wholly inadequate response to a national banking failure that has destabilised the economy and damaged the lives, jobs and welfare of so many people. The process fails to ensure public accountability from those most responsible. Investigations conducted in private, however well handled, will neither command public trust nor help restore domestic and international confidence in bankers and the banking system.