Richard Curran, columnist and broadcaster, co-author of ‘The Man who Broke Irish Nationwide’

It is a sign of how far we have fallen that in a conference about ‘where stands the republic’ – we end up talking about banks.   But they are an important part of our recent past, our present and sadly our future…. for a while.   A sign of achievement will be when we can have an important discussion about our country that doesn’t involve banks.   That will be a good day – a good for the banks also.

It is also interesting to talk about where stands the republic ahead of our exit from the bailout programme when we are hoping to get the keys of the republic back or at least the cheque book.

In a nutshell, what do we need to know about the banking system:  a combination of banks, politicians, regulators and borrowers contributed to a mess that left a €62 billion citizen bailout of the banking system?   At around 40% of GDP it was probably, for our size, the most expensive state bank bailout of a developed economy ever.   Banks have been taken over by the state.  They have shrunk, reduced lending, shipped big losses and tried to stay alive. There are some signs that they are making progress.  Wilbur Ross described his investment in Bank of Ireland his best in the crisis – its shares up 80%  since 2011.

Irish Life & Permanent has been sold. AIB and EBS are moving along, trying to get back to profitability.  However, in doing so, they have seriously wounded their customers by having to hike up standard variable rates on mortgages and preparing to move on the difficult and sensitive issue of mortgage arrears.  So, just as we may be putting the worst of the crisis behind us, we are entering a final phase which is likely to be very difficult.

Then along comes a man most of us had never heard of before: John Bowe – the Head of Treasury at Anglo Irish Bank.   The release of the Anglo tapes did a number of things:

– It brought new insight into what was going on inside a bank that cost us €30bn.

– The tone of the conversations made us cringe and was generally quite sickening.

– It highlighted to us how little we knew about the detail and mechanics of this financial crash that has cost us all so much.

– It reminded us that despite a lot of posturing, the government hadn’t really done anything about holding a major inquiry into the banking crisis.

We have to deal with the past properly in order to expect citizens to move on to the future. This is about fairness and justice, but also about knowledge to ensure it doesn’t happen again.

When the Anglo crisis happened, the citizens of this country needed two things; they needed an open, transparent and independent account of what went wrong -explanations. And they needed to believe that in the event that the law was broken, there would be some kind of sanction.

In the run up to March 2009 when the Gardai went in the front door of Anglo Irish Bank, various politicians were had been talking about a High Court inspector being appointed.   I think that would have been a very useful development.

But once the Gardai went in, they stopped calling for an inspector. Once the Gardai went in, everything went into shut down mode. The Gardai found themselves investigating an enormous, complex set of transactions, with limited resources, outdated legislative back-up and a very high burden of proof.

The attempt to satisfy the second of those needs – sanction – restricted the state from being able to satisfy the first need – explanation.

We have had a number of inquiries that have added to our knowledge and understanding of the mistakes that were made – the Honohan Report, the Regling & Watson Report, the Nyberg Report.   But they have not added to our understanding of who is to blame and they have not brought us any closer to the issue of sanction.   If everybody is to blame, then nobody is to blame.

Of course the boom years generated a culture of greed and misguided invincibility.  Take the guy who believed he could leverage up the equity on his home house to develop a portfolio of rental properties built on interest only mortgages, give up his job and never have to work again.   I think he needs to ask himself some questions.

But what about the couple who borrowed vast sums for a modest apartment just to get on the property ladder, blinded by and let down by the hype of institutions that should have known better.  Who could fault them?

We need a proper banking inquiry.  But there are problems. The only show in town is likely to be an Oireachtas Inquiry.

  •  This will not be able to make findings of fact against individuals.
  •  It may end up sitting in court as often as sitting hearing evidence.
  •  It may become too party political.
  •  It may focus too much on the run-up to the guarantee.
  •  TDs on committees tend to grandstand and seek headlines for their questions rather than the answers.

As a citizen I do not feel the need to see former bank chief executives on national television being harried for the sake of headlines.   But, I do want to be able to read their explanations and their account of what happened, delivered by them in the face of informed and tough questioning. I want to know the version of events of the main players and the not so main players.

I would like to hear Michael Fingleton’s explanation as to what went on in Irish Nationwide for example.  But I would also like to hear or read Patrick Neary’s explanation about what went on inside Irish Nationwide and why the regulator was so ineffectual.

But there are others who have a contribution to make. I would love to hear what non-executive directors of Irish banks have to say about what it was really like on the board of one of those lenders at that time.

I have spoken to some former non-executive directors privately who tell me their bank lost billions without breaching a single law, or code or rule.   Perhaps they have good explanations for how all of this happened.

I read an article a few years ago by economist Jim O’Leary in the Irish Times about what it was like on the board of AIB and I interviewed Con Power, a former non-executive director of Irish Nationwide about his experiences. They are the only two public accounts I can find where non-executive directors described how things really worked.   I found both of them informative and interesting.

Were the board of Anglo puppets for Sean FitzPatrick and David Drumm?   We don’t know. The Anglo tapes suggest they weren’t.  Interestingly, they make a few references where Drumm is anxious about the difficult questions the non-executive directors would ask about certain things.

We need some kind of banking inquiry.  If an Oireachtas one is the last throw of the dice then it should allow for experts who are not Oireachtas members either to chair it, or participate in it, or both. Ideally.  I would prefer if it was not an Oireachtas inquiry at all.

We need a broader expertise and a broader perspective.

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