An inquiry into the circumstances surrounding the 2008 banking guarantee is to be held. Judging by the previous inquiries we’ve had, I wouldn’t expect too much in the way of actual action, though previous inquiries (Moriarty, Morris, Mahon, Planning as examples) have produced lots of paper and lawyers’ fees as by products.
What should the scope of this inquiry be? And what would commenters like asked of the people likely to be involved in such an inquiry?
32 replies on “Banking Inquiry: What should its terms of reference be?”
The scope should certainly include the role of/advice from international bodies in the run-up to the decision.
Scope should be from 2001 on and seek to encapsulate the use of tax breaks by politicians and indefensible lending practices by the banks to make the Great Irish Asset Bubble.
The focus should be on the creation of, and senior management appointments to, the DDDA as the nexus of this.
The only question to be answered by any of the attendees is – “Why should you not be immediately arrested and jailed for economic treason?”
Who?
1. Why was there a total misallocation of resources by the Irish banks–all becoming mono property lenders.
2. Why was there a total failure of risk management.
3. Why were there inappropriate incentives to lending executives.
4. Why did the Irish banks boards not consider that David McWilliams just possibly might be correct in 1998/1999
How did it happen:
The detail of who said what to whom and in exactly what order they said it – privacy, reputation and international relations be damned.
Could it have been avoided:
Why were those who advised using options other than the blanket guarantee ignored?
Should it have been avoided:
Were there better options that could plausibly have been taken given the available information and pressure to act?
Why was it not stopped?
Once the scale of the mismanagement at the banks was apparent was there no way the guarantee could be rescinded or altered?
off thread – I find this disturbing if not surprising ..
€50m allocated for Traveller housing was never drawn down by councils
Underspending by local authorities on Traveller accommodation “needs to be addressed”, according to the Minister of State for Housing Jan O’Sullivan, as campaigners warn a policy of assimilation is killing off Traveller culture.
Since 2007, local councils drew down more than €50 million less than the Department of the Environment had allocated them to provide Traveller housing.
The figures follow a Council of Europe report last week criticising a “lack of political will on the part of local authorities” in delivering Traveller housing. Traveller groups say Travellers are being pushed into standard housing as part of a policy to assimilate them into mainstream culture.
http://www.irishtimes.com/newspaper/frontpage/2013/0225/1224330480025.html
Subtle apartheid – Irish style: worth noting that recent cutbacks to Traveller Education will reverse what has been an increasing uptake at Junior Cert level
off thread …
Way we treat asylum seekers will be State’s next apology
“We are a nation of chancers, and there are advantages to that. But at home we have a duty of care to the children of asylum seekers, most of whom are not fraudulent, and to face reality.
Last week in the Dáil, on the same day that the Taoiseach apologised to the Magdalene women, a written question revealed that the Irish taxpayer paid out €655 million between 2000 and 2010 to provide asylum seekers with accommodation. That is a very high price to pay for the luxury of forgetting about a group of people you don’t like.
That same accommodation was characterised by a European Commission on Human Rights report last December as having “negative consequences on their mental health, family ties and integration prospects”.
http://www.irishtimes.com/newspaper/opinion/2013/0225/1224330475669.html
Hey! I was under the impression that Ireland had an EXCESS of uninhabited PROPERTY. Hello NAMA! HELLO NAMA? Any oul spare houses around sir?
Very simply, the banking inquiry should attempt to find out the mix of causes behind the banking bubble and subseqent collapse, namely how much was due to each of the following:
(1) poor government economic policies (pro cyclical policies towards banking/property sectors)
(2) too aggressive bank lending (nominal lending as well as weaker credit policy)
(3) weak internal regulatory oversight (ie CBI/FR)
(4) weak external regulatory oversight/rules (ie Basle/ECB), particularly vis-a-vis risk weightings on residential mortgages and “true” level of capital given inability for much of it to take a loss
(5) too loose monetary policy (ie ECB negative real interest rates in Ireland)
(6) other factors somewhat out of the control of policy makers (globalisation of capital flows/banking system, rise of TBTF, interlinkage between capital markets in different jurisdictions and potential for contagion etc)
(7) the fact that practically no govt/central bank, anywhere, knew how to actively manage the scale and inherent dangers of a growing banking system, or how to effectively crisis manage it without large taxpayer involvement when they eventually got into trouble.
The only benefit that I can think of of such an inquiry would be if we found out that there was a deliberate collusion on the part of politicians and bankers to provide a solution that would benefit the banking industry at the expense of the state.
There isn’t much evidence at the moment to suggest that that happened.
The main political players seemed to hold the view that protecting the banking industry would be in the interests of the state.
Is there evidence that the banking industry deliberately misrepresented their levels of solvency in order to give politicians the impression that a guarantee given to the banks was a viable option?
What was the role of the ECB?
There have been a lot of financial journalists who have investigated into what happened and there has not been a smoking gun yet.
Eoin,
I would add the following-
Why was Anglo not put into some kind of administration given that it DOF knew it was insolvent?
Why was Anglo mgmt left in place post guarantee for three months?
Where did the guarantee come from? Banks/DOF/DoT/ANO?
Was there any political interference in regulation post euro entrance?
A banking Inquiry should have:
1. The power to compel witnesses to appear and answer questions. The power to issue criminal warrants for any who refuse to appear, and impose criminal sentences for those who refuse or fail to answer. This should extend to any conceivable person present or former bank employee, minister, civil servant, regulator, accountant, auditor, consultant, solicitor, or priest.
2. The power to subpoena any and all documents, communication records, data, records, rolls, minutes, etc from any individual or institution as evidence, regardless of commercial sensitivity or privacy concerns, etc. Also the power to hear and publish any evidence publicly, again regardless of such concerns.
3. The power, means, and funding to call expert witnesses to give their opinions, recommendations, and explanations on evidence presented.
4. The power to make and publish findings of fact, regardless of the impact of such findings on the good name of any individual or institution. The power to make recommendations based on evidence.
5. The inquiry should have the responsibility to make an as comprehensive, explanatory, elucidating, and final a report on the entirety of the Irish financial crisis as is humanly feasible. Its brief should reflect this.
6. The inquiry should be chaired by someone from outside Ireland, and outside of the financial sector.
@Eoin
That list has two types of “weak regulatory oversight” as the nearest you get to having accountability for, or explanation of, the decision to guarantee basically all banking liabilities.
Terms of reference drawn so as to apparently inquire into something, but leaving certain aspects outside the terms, are always helpful to those who would prefer some stones to be left unturned.
The banks are the tip of the iceberg. Any inquiry should cover the period from 1997 onward and include government, senior civil servants, Central Bank of Ireland, Financial Regulators, legal and illegal contributions to politicians.
The form should be military tribunal with a credible threat of execution for perjury. The crime is theft on a grand scale. The last thing we need is another multi million boondoggle that solves nothing. This could only happen if SF achieved a clear majority after the next election and even then cute hoorism is so embedded in the culture that SF itself would be co-opted.
The proper way to handle the banks would have been to force them into bankruptcy and if the Gov’t wanted to “save” them it could have bought them out of bankruptcy. All obligations would have been wiped out in bankruptcy proceedings and the Gov’t would start owner ship with a clean sheet. All the weeping and gnashing of teeth would have taken place in Frankfurt, London, New York, Paris not in Dublin, Galway, Cork, Limerick.
1997 — 2 years before joining the euro: Central bank governor Maurice O’Connell, told the Oireachtas Committee on Finance and the Public Service in early 1997: “There seems to be a perception that the Central Bank can exercise some legal authority in restricting credit. It has no such authority. Any restriction would be inconsistent with European Union practice. Besides, it would be unworkable as demand would probably be met by overseas lenders.”
Banco de España and its banking supervisor, put a system for special loan-loss provisions in respect of the big banks, in place in July 2000, to cope with a sharp increase in credit risk on Spanish banks’ balance sheets following a period of significant credit growth. Moral suasion had proved to be inadequate in inducing banks to become more conservative. Moreover, intense competition among banks had resulted in inadequate loan pricing – – that is, risk premiums were too low. The new system in effect obliged the banks to build up a fund for the rainy day.
The inquiry
There is little suspense here and what there is it could have been allayed by publishing relevant documents from the last week of Sep 2008.
When Noonan became justice minister 30 years ago, he released files on Haughey’s authorised wiretapping.
The common defence is that ‘we were all stupid’ but on the public side it could be useful to identify warnings that were ignored.
There are 2 crucial players at the Central Bank. When they were singing mantras about resilient banks, had the senior economists issued any warnings about the risks in annual credit growth of 30%? Karl Whelan should be able to help on that.
At the DoF, there are similar possibilities.
As for lessons, unless internal papers are published every 5 years, there are likely to be none once this storm passes. That is what happened after the 1980s disaster.
At government level, spin or being economical with the truth endures.
Michael Noonan said in London last week:
“The services sector is playing an increasingly significant role in export growth, having grown by 9.4% over the first three quarters in 2012, and now exceed the level of goods exports by just over a billion euro. This owes much to the significant price and cost adjustments that have taken place in recent years.”
This is absolutely untrue but I also bet nobody pulled him up on it. What has changed?
The key thing here is to follow the contacts with Anglo and why Fitzpatrick was told to get lost from Government Buildings on the Monday evening when his bank was the main issue. Anglo needed a loan of over €4bn and IL&P required a central bank guarantee.
The role of economists should also be considered as they provided the intellectual justification for crazy policies.
How the chiefs at BoI and AIB reacted to being called plonkers almost every Sunday by Shane Ross for not producing returns as impressive as the then 2 maestros, should be looked at in the context of their reaction to Anglo’s performance.
In the US, Stan Neal, Merrill Lynch’s chief, used to have regular meetings with his lieutenants on how to react to Goldman Sachs but he ended up as head of a bust bank .
As to the role of the ECB and who on the Monday evening proposed that there be no contact with any senior European official; the heads of Ecofin and the Eurogroup; the Economic and monetary affairs commissioner and the ECB president or colleagues of these individuals, should be explored.
As for the ridiculous confidence in low loss scenarios for property lending at the banks in Sept 2008:
a) Post the Lehman crash, it should have been obvious that there would not be a quick property recovery.
b) the subprime crisis had broken out in the US 17 months before; it was 13 months since the onset of the credit crunch and big Irish developers were not even paying interest on their loans.
c) Yields on US Treasuries were at the lowest since the Pearl Harbor attack; credit markets had frozen up and on Sept 25, 2008, The New York Times reported:
@ Bond. Eoin Bond
Finland, a member of the EMU, came into 2008 with a net cash surplus of €130bn. It had the same GDP value as Ireland’s.
We need the answer to one question at least;
Why did the government of this country, gamble the entire country the ‘save’ the banks on the night of Sept 28th 2008?
What information did they have before them to embark on such a course?
Were they deliberately duped by bank directors?
Were they deliberately duped by public servants/ regulators?
Were they coerced by the ECB or EC or other outside bodies or countries?
Why should people who sold the country down the Shannon, contnue to benefit from its largesse?
“the fact that practically no govt/central bank, anywhere, knew how to actively manage the scale and inherent dangers of a growing banking system, or how to effectively crisis manage it without large taxpayer involvement when they eventually got into trouble.”
Michael Lewis says it well
http://www.nybooks.com/articles/archives/2013/mar/07/way-they-live-now/
In neither place were the windfall gains to the people in finance widely understood for what they were: the upside to big risk-taking, the costs of which would be socialized, if they ever went wrong. For a long time they looked simply like fair compensation for being clever and working hard. But that’s not what they really were; and the net effect of Wall Street’s arrival in London, combined with the other things that were going on, was to get rid of the dole for the poor and replace it with a far more generous, and far more subtle, dole for the rich. The magic of the scheme was that various forms of financial manipulation appeared to the manipulators, and even to the wider public, as a form of achievement.
@MH
Even the Pope knows that Michael Noonan could say mass.
I would like the banks to confirm;
1. Do you create the money you lend such that money is created with an even higher debt?
2. Do you delete the money you recieve for loan repayments?
Given the answers to 1. and 2. are yes then follow up question could include;
3. How do you expect all loans to be repaid when the economy owes more to banks than exists?
4. Is it right that the banking sector gains assets under a system in which it creates the money it lends?
5. How can this system run with stability?
And many others.
@Tullmacadoo et al.
This specific question is one that really needs an answer.
In Sept 2008, just before the guarantee, Anglo’s share price had fallen from over €17 to a little over €2. There had been newspaper stories about the huge losses Sean Quinn (a nice family man, apparently) had taken. A hint perhaps, that Anglo were insolvent?
However even if the powers that be had spent the entire Summer of 2008 in a drunken haze, it doesn’t explain the fact that in January 2009, in a submission to the EU on state aid for banks, they stated that Anglo remained a solvent bank. This makes no sense. Specifically the EU noted that
By that time the share price had collapsed to a few cents.
The sequence of events as to who overruled who, and for what reasons, to maintain the fiction that Anglo was solvent and fundamentally sound as late as 2009, needs to be brought out into the open. That State Aid submission was signed by a Mr. Micheal Martin, a man with the same name as the leader of the most popular party in the state, according to some recent polls. Surely some mistake?
This thread asks for suggestions on terms of reference and specific questions the inquiry might put. With regard to the latter, it is always a good idea to have pertinent questions to ask, but the real skill, and often limiting factor, lies in the capacity to formulate appropriate follow-up questions.
If the intention is to hold an inquiry largely in order to say “we have held an inquiry, we obviously won’t do it again, now buy our bonds” without any particular interest in unearthing embarrassing facts or shaking inconvenient truths out of trees then perfectly competent-sounding questions met by a defensive straight bat, but without dogged follow-up questioning will suffice. A decision about this aspect of the character of the inquiry is appropriate, early doors.
If the inquiry is to be help by the Oireachtas then who is to do the questioning? Politicians can sometimes be quite effective if, and it’s a big if, they really understand their brief. Committees comprised of politicians have the problem that no matter how much progress one questioner is making, or how superior their insight, everybody has to have a turn – which means long winded, evasive answers by the questionees often succeed in frustrating the process.
Back in summer 2008 you couldn’t pick up a Sunday newspaper without reading speculation about Anglo’s declining share price and solvency, developers’ solvency and un-saleable housing estates and commercial property.
1. What was the government’s take on this week by week?
2. Do the papers, minutes of meetings concur?
Speculation was so widespread that there was a bank run.
3. Throughout 2008, what briefing did government get about this?
4. What briefing or discussions occurred lower down the food chain (MoF, CB etc) that did not get presented to government, and how were decisions to brief or not made?
Relatively unsophisticated investors who were in no way ‘insiders’ and who had assets at Anglo were moved to ask in August “Could Anglo really actually go bust?”
5. It doesn’t seem credible regulators or government could have been so far behind events to not have at least asked of their advisers this question by that time. Did they, and what were they told, and by whom?
6. If they didn’t ask by then, how was the decision made and why, and who decided, not to brief them anyway?
As an outsider, my response to the question about Anglo going bust was ‘yes’. Remember it was “Could”, not “Will”.
7. Did anyone brief, formally or informally, that Anglo, INBS or PTSB “could not” or that “there was no realistic possibility that it could” go bust? If so, who did so and how was that conclusion reached?
The follow up to the question I was asked was: “And what about the other banks?” As a mere outsider, but with some familiarity with investment risk and having seen banks go under in the past, my answer was just the most sensible speculation I could come up with, but I would suggest should have been readily obtainable from many competent sources of advice, not as a definitive position, but as a decent starting point for further analysis. It amounted to: “Theoretically they could go too, but can you imagine the chaos – they need BOI and AIB to stay open, but at the end of the day, who really needs Anglo?”
8. Did a preliminary position that AIB and BOI had to be kept open, but that Anglo was rather different emerge? If not why not?
9. If that was the preliminary approach, precisely what information and alternative analysis was presented by whom, and under what circumstances to the contrary and who disputed it, how?
It is understood the MoF had prepared views on bank guarantees early in 2008.
10. To whom, when, and in exactly what form were the MOF views on this presented?
David McWilliams pushed the idea of a bank liabilities guarantee in (I think) Sept 2008. A minister has claimed he was told he was being asked to sign off on “the McWilliams option”.
11. Is it the case that thje MoF advice and the Merrills advice was trumped by newspaper articles by and a late night chat with a charismatic economic pundit whose stock was buoyed by his long standing bearish views of the Irish property market being proved correct?
12. What communication or representations, formal or informal were made with respect to the question of Anglo going under, to either officials or ministers, either direct or via third parties, by persons who might have held deposits with or bonds issued by Anglo or INBS?
13. Did some information or consideration not taken into account in the Merrills or MoF advice come to be considered by ministers? Was David McWilliam’s article the really persuasive thing, or did it provide ‘cover’ for something ministers or officials came to ‘prefer’?
14. What discussions were held, and what analysis was presented regarding the obvious difficulties that would arise following an ending of the guarantee should it turn out that the evident consensus market view of Irish banking was correct, prior to it being announced?
15. What were the perceptions among senior officials and ministers about how they personally would share in the risk to the state’s credit worthiness if they decided to take the bank’s liabilities on to the state’s books?
16. Were ministers panicked immediately before the guarantee was announced.? If so, why had they been able to avoid panicking earlier?
17. What effect did the Anglo share support via Quinn’s CFD contracts together with the subsequent supposedly illegal share support scheme have in disguising the strength of the market signal that Anglo’s business was fundamentally flawed and the the bank might be insolvent?
18. Did ministers and officials understand that such market manipulation would prevent or slow a share price crash and funding freeze? Were the advised on this? If not why not? Would they have panicked earlier, and thought things trough or obtained further advice if they had been so advised? Did they inquire themselves as to what the significance of this widely publicised situation might be?
19. It is said JCT left a voicemail to the Minister for Finance urging him to do something or other with regard to Irish banks. Did that happen? What other ECB communications were there, if any?
A Hutton style publication of documents is going to be the preferred way of allowing conclusions to be drawn. There have been accounts, versions and interpretations put into the press by some people who were part of or associated with the government of the time. Their recollections will not pass the “He would say that, wouldn’t he.” bar if not corroborated by documents and informed follow-up questioning. Questioners should, if politicians, avoid grandstanding, focus on the nitty gritty, be intolerant of waffle, be able to think on their feet, know their brief and be prepared to be occasionally grumpy and make themselves unpopular.
Oh, and I forgot:
20. How was the decision to guarantee bonds and time deposits that had already been issued or taken by Anglo prior to the guarantee taken. What advice was sought on this point, who provided it, what was the logic of this course of action supposed to be?
@ grumpy
+ 1
This inquiry could be of immense help to Seán FitzPatrick in respect of the knowledge of officials on Dame and Merrion streets about the unwinding of the Quinn stake.
There were few orthodox means that the bank could arrange to prevent the share price from crashing.
One of the extraordinary issues is that Neary, the financial regulator, claims he did not learn of his staff’s discovery of the FitzPatrick director loans in late 2007/early 2008 until Minister Brian Lenihan raised the issue with him on 10 December 2008.
Even as the crisis mounted, nobody even whispered this info?
If true, what a crazy organisation he was running! It must have resembled a Cistercian monastery.
What role did the corrupt ansbsacher account owners have in the bank guarantee?
What role did the corrupt ansbacher account holders have in running the commercial property cartel.?
What role did the tax exiles have in the bank guarantee?
The most interesting witness by far would be McWilliams.
Here are some questions I would ask him.
A week before the guarantee you wrote an article advocating a guarantee of all the assets in the Irish banks.
The day before the Guaranteee you wrote an article where you seemed to extend the scope of your proposal to include assets and liabilities.
Was this your own idea? If so what made you wish to extend it? If it wasn’t your idea what made you think it was a favorable option
Did the minister indicate to you that he believed that the banks actually had insolvency rather than liquidity issues?
You claimed in your book that when the minister called on your door that he expressed the opinion that the civil servants just didn’t appreciate the magnitude of the problem and how serious it was. Do you think he gave your plan such weight because of this belief?
You later claimed in an article that the blanket bank guarantee was a bluff.
Did you inform the minister before the guarantee that your plan was indeed a bluff that he should back out of if it didn’t work?
When you were brought in cabinet to convince the green party that the plan was the best way forward did you explain to them at that time that the plan was a bluff?
In hindsight given that it turned out that untangling and backing out of the guarantee was not something the government could or would do due to the immediate effect it would have on the Irish banking system was the blanket guarantee a wise course of action?
If given his ear again at the crucial time what would be your advise to the minister?
Brian G
It seems very odd that M. Martin would have signed such a document given that the SG of the DoF is recorded as questioning how big the capital deficit was in Anglo in the immediate run up to the guarantee.
@eamonn moran
The Minister could have rang–Paul De Grauwe,Joe Stiglitz,Paul Krugman ,Patrick Honohan,Karl Whelan or any economist in the world for advice. Did that thought ever cross your mind.
I was asked to do a presentation for An Oireachtas Committee on upward-only rent reviews. I rang a friend at the LSE who referred me to Mary Whitehead Professor of Land Economy who in turn referred me to Professor Colin Lizieri at Cambridge who in turn recommended Professor Neil Crosby at Reading University. So within half an hour I was speaking to Neil Crosby who advises the UK government on commercial property.
I sell shoes for a living.
I didn’t ring David McWilliams. David McWilliams is not God. Rover the dog knew their was a massive property bubble, you didn’t need the primary cert to realise that. Morgan Kelly spotted the 1999 property bubble in 2005–too late the game was up. Stop blaming an economic popular journalist for the guarantee. It was the shower in Leinster House, who are run by the alumni of the Galway Tent School of Economics and the Ansbacher mob. –thats who runs this country.
McWilliams would be interesting, but far more interesting would be the reasons why he was being called up at all.
The biggest open secret of the crisis is that the DoF had plans, as far back as Feb 2008, to guarantee the main banks. A guarantee of some kind was always on the cards. However, despite their closeness to BoI and AIB, officials in Department of Finance apparently never wanted to guarantee Anglo Irish bank or presumably Irish Nationwide.
But Fianna Fail did.
Enter the late Brian Lenihan’s midnight visit to McWilliams’ home. It seems to me that Minister Lenihan was fishing for an economic blessing for his plan to bail-out Anglo; he needed some kind, any kind, of economic advice which could be used to justify the plan. Anyone would do, but he found himself arriving, nigh unannounced, at McWilliams home.
It would be very interesting to know if Minister Lenihan attempted to contact any other economic voices before this? Ones with more political saavy perhaps?
I believe that there were always two bailouts. One bailout was for the traditional bankers, orchestrated and planned alongside their backers in the Department of Finance, and on the cards for a very long time. The second bailout was for the (FF) developers and their banks, Anglo and Nationwide. This bailout was backed and orchestrated by FF members, and opposed by certain members of the DoF. The chaos in 2008 was partly caused by intrigue and confusion of the government being pulled in two (equally bad) directions.
The children of these two bailouts were Nama and IBRC. Two bad banks; one to shunt pillar bank losses on the Taxpayer, the other an aborted attempt to save Fitzpatrick and the developers. This month’s special liquidation finally resolved this doppelgänger incongruity, but only after it ended up costing Irish people twice what it should have.
It’s no good calling up McWilliams without finding out why he should be called up in the first place. There is more to this crisis than one midnight meeting and one economists advice. There is a deeper, untold story of the bailout that needs to be uncovered. A full banking inquiry should uncover all such aspects of the decisions which ruined Ireland.
@ eamonn moran / OMF
Even if David McWilliams viewed the guarantee a bluff, the worst case scenario (not often considered in Ireland) was that heightened uncertainty would continue for an extended period. Maybe then it should have been issued for 6 months not 2 years?
There was an impression via the media on Sept 30 that Irish officials were happy that other European countries were shown to be flat-footed. Deposit funds would flow into Ireland even though Fingleton’s son was zapped for being too public in his crowing in London.
On February 8, 2008, a Department of Finance official warned in a presentation marked “Secret”: “As a matter of public policy to protect the interests of taxpayers any requirement to provide open-ended/legally binding State guarantees which would expose the Exchequer to the risk of very significant costs are not regarded as part of the toolkit for successful crisis management and resolution.”
Later in the presentation: “State guarantee to underwrite a Bank’s solvency (could only be justified in circumstances that otherwise the entire financial system is at risk of collapse).
Link to PAC issued documents here:
http://www.finfacts.ie/irishfinancenews/article_1020821.shtml
@Michael Hennigan
“State guarantee to underwrite a Bank’s solvency (could only be justified in circumstances that otherwise the entire financial system is at risk of collapse).”
Wasn’t that the way it was presented? That if the Government had not acted the whole European financial system could have collapsed? So therefore it was felt it was justified by Lenihan and the cabinet.
Again remember it was acknowledged that some civil servants in the DoF were against the move.
@John Corcoran
I don’t remember any of those mentioned economists advocating a plan that would save the Irish banking system.
McWilliams did.
Whether you would have contacted him is not the issue. Lenihan did.
Whether you would have used him to convince your minor party in government to go ahead with the plan is not the issue. Lenihan did.
You may not like the idea that Lenihan used him instead of some other individual but I don’t think anyone is denying that he did.
“Mcwilliams is not a God” Obviously.
Whats your point? Is it that you find it hard to believe such an important decion was dealt with so badly and without the required expertise? It was a crisis.
OMF
What about Cowans alleged comment?
“We are not F#@{ing bailing out Anglo?”
It doesn’t fit with your narrative.
@eamonn moran
Paddy McKillen didn’t use David McWilliams he chose Joseph Stiglitz, a Nobel prize winner for his advise. Why would any sovereign government be seeking the advise of a popular economic journalist like David McWilliams, to make the biggest financial decision in the history of the state?.
@eamonn moran
It doesn’t because that’s not what he’s alleged to have said. Cowen’s comment is reported to have been “We are not fucking nationalising Anglo!”, complete with fist thump. I have also heard it reported as “We are not fucking letting Anglo go (to the wall)”. Again there has been no inquiry, so we really don’t know.
As has already been explained, the DoF was planning a guarantee for at least the previous 8 months. You can compare this “crisis” very lucidly with the rushed special liquidation of IBRC, which again was in the pipeline for months in advance.
If by “use” him you mean sought advice, then we don’t know in Lenihan had sought advice from other individuals, within the civil service or otherwise. The only reason we know he visited David McWilliams is because McWilliams wrote(blabbed) about it later on in his columns/book. For all we know, Lenihan could have been having meetings and late night teas with half of the economists in the country. This is one of the reasons we need to have a proper inquiry.
All these elaborate questions seem to assume that the bank guarantee decision was just a honest technocratic glitch (oops!) and that rational answers will be forthcoming, that “we” can all learn from the guarantee and any future crisis will be avoided.
But you all know that in Ireland expensive tax-funded “inquiries” are the traditional memory-hole tactic. Nothing will come of it, quite deliberately. You all know this and treat an “inquiry” as a collective ritual whereby all challenges to the existing power structures remain intact (thank God), if not strengthened.
Budding central planners venting on blogs under the lunatic delusion that “we” govern ourselves.