Regling and Watson at the Finance Committee Post author By Karl Whelan Post date June 15, 2010 Here‘s the transcript of Klaus Regling and Max Watson’s appearance before the Oireachtas Finance committee last Friday. Categories In Banking Crisis Tags Regling and Watson report 8 Comments on Regling and Watson at the Finance Committee ← The September 2008 Guarantee → Does Fiscal Austerity Reassure Markets? 8 replies on “Regling and Watson at the Finance Committee” Forgive me for coming at the issues from a tangent! But as a taxpayer I resent the fact that the public purse funded a column of civil servants that did not perform their functions. This was a waste of valuable funds over a series of years, and future costs if one includes pensions. It is highly ineffective to practise governance in this fashion, and asks a bigger question of whether other functions of the state are staffed in a similar fashion? Forgive me for finding your comment quite funny Al, it’s a common theme and while it’s perfectly plausible that you had absolutely no part in what happened to the country, it’s quite possible that you are somewhat to blame as are almost all of us and we should start accepting that. While we’re all happy to see open acknowledgement that the politicians, regulators, bankers and senior civil servants were particularly negligent I think it’s disingenuous in the extreme to lay the blame solely at their feet. By all means hang them all but lets get real about this – we let them do it, no scratch that we actively encouraged them. We were all* complicit in the shared delusion and participated in the irrational exuberance that characterized the Celtic Tiger years. That we have independent expert opinion that our politicians, regulators, civil servants and bankers failed to be prudent is nice to see (in a perverse sense admittedly) but the rest of us have to accept that we all allowed this to happen by buying into the fiction that there was real, sustainable growth driving us forward. *OK not all, there were some folks (including some wise heads who post here to be sure) who are on record as having pointed out that the emperor had no clothes (or at least had pretty shabby ones) but most of the people complaining now were happily fueling the property bubble, speculating in investments they had no real idea about and building houses of straw on foundations of sand while dismissing those pointing out the problems as whinging begrudgers. I’m all for naming and shaming the key players here but we could do with taking some time to be critical of our own behaviors too. It will do us all a lot more good in future if we realize that we allowed ourselves to get lazy and as a result allowed those responsible for keeping an eye on things to get reckless. We all knew the banks were pushing mortgages to the dogs on the street, and we all let it happen too. I forgive you Joey. Forgive me for pointing out that I wasnt at the Galway Races and all that, or that I didnt seek to personalise any of my comments above. If the results of our attempts at governance are equivalent to the results of some form of libertarian government, then surely it makes sense to shrink the size and cost of our Government into something that reflects the actual effectiveness of it. Would you regard that as a stimulus? Al’s comments on the constant need for vigilance regarding the size of the public sector – while admittedly off topic, are entirely appropriate. On the subject of this banking crisis report, I have had about enough of the kind of buck-passing that Mssrs Watson and Regling engage in in their introductory remarks: “It would be easy to say that the Central Bank should have rung the alarm bells earlier and louder….” Yes, very easy…. because they should have!!! Irish banks had clear lending guidelines in which mortgages would not be given in excess of 3.5 times the borrower’s annual income. It was blindly obvious that this rule was being broken for every mortgage issued. At the height of the bubble, the Irish Central Bank sat blithely by and allowed this to happen. They did not see a need to curb lending in 2005-2006, perhaps because they were in the process of given themselves whopping pay rises. Staff costs increased 15.7% – this for an institution with one arm doing nothing but producing silly TV ads about people on buses who don’t know what tracker mortgages are, and another arm that watching the printing presses in Sanyford and shrugging that they are helpless victims of international capital markets. Nonsense. @ Joe “We all knew the banks were pushing mortgages to the dogs on the street, and we all let it happen too.” Excuse me but I beg to differ-if you sign up to a 100% mortgage interest only for the first 5 years to buy your dream home etc…. It is none of my business to intervene and save you. What should I have done-met the bank manager and insisted that he withdraw his offer to you???? And what is this WE are all responsible there are hundreds of thousands of people in our society who have no responsibility for what has transpired here (except for voting the same bunch back into the Dail time after time). Congratulations Joe I represent the estate of the recently deceased Keltic Teger. He bequeathed to you through my office that your mortgage is to be paid. To avail of my clients generosity please forward your bank account details so that payments can commence! @Joe Mansfield: “We were all* complicit in the shared delusion and participated in the irrational exuberance that characterized the Celtic Tiger years.” Nonsense. There have been plenty of people pushing that line over the last year or so, but they can carry their own can, thanks very much. @ Ronan I think Joe has a fair point, and is not really at odds with you. As I read him, he is suggesting that there was a larger social process at work, and that we need, as a people, to get a bit fitter in our approach to politics. It’s time to wake up and smell the coffee, as no one else is going to mind our shop. Principal agent problems need to be identified and resolved. That recognition is perfectly compatible with holding those most responsible for the mess to account, and more importantly, getting our dosh back off them, or their associates, one way or another. Any ideas on that score ? Comments are closed.