It is still some months before the bank inquiry will commence public hearings – but what we are learning about its scope and design gets worse by the week.
The latest blow is that the investigation won’t be able to probe Cabinet discussions on the night of the bank guarantee in September 2008.It comes after a poorly handled political fiasco which resulted in Independent TD Stephen Donnelly quitting the inquiry. Mr Donnelly, a former management consultant with McKinsey & Co, has distinguished himself as one of the most forensic interrogators of bankers at hearings of the Oireachtas Finance Committee.
The bank inquiry follows three detailed reports into the financial collapse. Central Bank Governor Patrick Honohan examined regulatory failures, experts Klaus Regling and Max Watson analysed the economic backdrop to the crash and Finnish economist Peter Nyberg highlighted the group-think which helped drive the economy over the cliff.
But unanswered questions remain over the deliberations which led to the bank guarantee.
Why did the then Government opt to guarantee everything in the banking system, thus exposing the taxpayer to an enormous bill?What exactly did the banks tell then Finance Minister Brain Lenihan? What was the cabinet told about the views of then regulator Patrick Neary and then Central Bank boss John Hurley.
The cloak of confidentiality has been used too often to hide information which should be in the public domain. Whatever arguments may apply in other instances, the decisions by politicians and regulators at the zenith of the banking crisis will continue to cost Irish taxpayers for decades to come. In that sense they are exceptional.
The inquiry deserves full access to all the documentation related to the night of the guarantee. The media has been blocked from viewing much of that material.
It may be the case that most of the important points are already in the public domain. But if some information or discussions are treated as classified the taxpayer can’t have full confidence that the investigation will obtain full answers to all the outstanding questions.
The main point of the bank inquiry was to unearth everything which had not already been touched in the three Government-commissioned reports. Without that the inquiry seems hobbled before it even begins.
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