Independent TD Stephen Donnelly has resigned from the committee of TDs and Senators charged with investigating the banking crisis. This follows a week where the government lost a vote, then rammed home changes to the composition of the inquiry committee to ensure it had a majority.
The reasons why the government lost the vote aren’t really that important. Remember both Houses held full debates on the establishment of the banking inquiry and the Government then unilaterally amended the motion that established the inquiry when it was clear it wouldn’t have a majority. It could have simply said ‘yeah we messed up, but you, know, custom and practice, lads’, and moved on, or allowed the inquiry to proceed unmolested, but then the Taoiseach defended the action to impose a majority, claiming the government wouldn’t have enough control over the inquiry:
you [presumably the government] need to able to approve terms of reference, a work schedule, and you need to able to approve a report at the end of it.
It all kicked off, and Donnelly resigned. There were some tense exchanges between Deputy Donnelly and Minister Leo Varadkar on radio on Sunday morning. Since then the polls tend to show support for Donnelly’s decision.
There have been several direct and indirect investigations into the circumstances surrounding the banking crisis. The Honohan report, for example, looked at regulation but obviously delved deeply into banking matters as well. None of these investigations have taken place in public, and none dealing with the ‘run up’ to the banking crisis, from the late 1990s to 2013 when we exited the bailout, or from 2002 to 2013. Colm McCarthy has a good post on why the terms of references should extend that far back.
The credibility of any findings from the new banking inquiry have clearly been called into question. Colm gives an explanation for the clear need for another inquiry:
The inquiry should explore whether any warnings were voiced within the banks, and whether the banks paid any attention to the warnings available from other sources. It should also explore the failure of international monitoring by bodies such as the European Commission, the IMF and the OECD, all of which produced excessively complacent assessments in the years leading up to the crisis.
Colm finishes with the sentiment I think we’d all hope the inquiry leads us to:
The inquiry is about accountability, not about dishing out retribution.
And yet, following last week’s events, commentators can’t help asking every government and opposition talking head what the ‘real’ reason behind the banking inquiry is.
As usual, Miriam Lord put it best, this might well simply turn out to be the Oireachtas Committee on Embarrassing Fianna Fáil over the Banking Crisis.
Accepting that there will be no rowing back of the appointment of the two Senators, in the interests of increasing the credibility of the final report, there are two remedies I can see. The first is that one of the newly appointed Senators resigns and is replaced by Stephen Donnelly, without any admission of guilt on the government’s behalf. This partially restores the credibility of the committee while co-opting Donnelly back onto the committee, which really could use his advice and expertise.
The second is for the non-governmental committee members to resign en masse once they’ve seen the terms of reference, especially if they don’t like what they see, particularly in terms of the time frame the inquiry will cover, the role of the banks, regulators, and the media in the run up to the crisis, and processes to ensure accountability trumping retribution.
Update (Wednesday 18th): Well, that’s that then.
70 replies on “Is our banking inquiry nobbled before it starts?”
The Guv’nor, a few years back, called for a ‘broad social scientific analysis’ of the greatest social, economic, and financial balls-up in the history of this little state.
In the lead up to – and up to the present: One musk as what the ‘academic community’, broadly defined, has been doing? Not good enough to ‘blame’ international bodies – IMF, OECD, EU Commission, ECB, etc. – a small globalized state must depend on its own intellectual resources to ‘mind itself’.
In this regard the Academic Community, ESRI, RIA, public intellectuals (if any exist?) etc FAILED ABYSMALLY to UNDERSTAND ITS OWN CONTEXT and INFORm CITIZENRY. This is FACT.
To me it appears that said community is still waiting, like a good little complacent boy or gurl, for some Entity on High to tell it what to do. Again, simply NOT GOOD ENOUGH.
Message to said community from its screwed Citizenry:
Self-organize in an interdisciplinary group and bleed1n well figure it out – and let us know.
If you are incapable of doing so – accept your maudlin middlinmediocre miserable standing and waffle away to yourselves.
… and none of this crap about ‘insufficient resources’ …. intellectual resources are located between ears ….
… whether anything of real value exists between said ears remains, for the mo, a very open question.
@ Stephen in case you missed it.
“The second is for the non-governmental committee members to resign en masse.”
Michael martin said FF would not be dong that on Morning Ireland this morning when pressed by the interviewer.
@Eamonn, missed that. A pity.
The Banking Inquiry is DOA. There will be a GE in the Autumn and the new Taoiseach (it will be a new one) can decide whether or not she wishes to proceed with it. By then Stephen Donnelly might even be a minister for something really important.
My suspicion is that it will never happen. In any even what do we need to find out that we do not already know?
Spose Alan will be too busy ….
The last time a group of TDs took on a difficult issue – they started a civil war.
There is much that we do NOT know – and quite a few who wish us never to know ‘who’ & ‘how much’.
“In any event what do we need to find out that we do not already know?’
It’d be nice to have some guidelines on how to run a country in the event of a sudden influx of cash for the next time it happens.
Less of this
More of this
Maybe get to accountability 1.0
It would be a good place to start.
Perhaps you are right on the last point. We do not know who was whispering in who’s ear in the run up to the guarantee. One would venture that any advice give to our leaders went beyond suggesting a 5 iron on the 2nd in Druids. However, that advice was never minuted and can never be proven. So no inquiry was going to uncover it.
The last admin is now home free and will be back as the junior party in govt by year end.
spose extra-ordinary rendition to the dublin mountains is out of the question?
If they could merely encourage minute taking and filing of important documentation it would represent progress.
Colm from 2012:
“In Ireland, almost four years after the balloon went up, not so much as a parking ticket has been issued. Inquiries are under way by the Director of Public Prosecutions, An Garda Siochana, the Criminal Assets Bureau and the Office of the Director for Corporate Enforcement but none has yielded fruit. The Irish banking bust has been described by Central Bank governor Patrick Honohan as one of the largest, relative to the size of the country, which has ever occurred anywhere.
The snail-race by the investigating bodies is an embarrassment, has fed public cynicism and the belief that those responsible for the disaster will never be brought to account…
…It does not matter which Oireachtas committee undertakes the next incomplete inquiry.”
Personally, I think Philip Lane should pitch for conducting it as an interactive inquiry with inquisition via the Interweb and Witter in league with Channel 4, or Big Brother or something.
Does anyone really think Irish politicians are up to the task?
Six years after the bust…and things still move at the speed of a glacier but a bust-up always gets people engaged.
Apart from some theatre, people including FF voters will feel outraged again and what will change?
The public has no interest in change; nothing of significance will result as the ECB will in future regulate the main banks.
What are the main protagonists going to say: “I cannot recall,” “the IMF blah, blah,” “economists praised us..” “Our rivals were stealing business from us..” “The regulator…”
The big law and accounting firms are thriving through boom and bust and I came across the results of a survey of SME firms this morning with the majority saying the government was doing a better job with troika supervision.
During the bubble business surveys invariably reported gushing admiration for McCreevy and Ahern.
So it’s great to be wise after the event and it doesn’t matter a damn how many reports are produced, the only future guarantee of fiscal sanity is some external supervision.
Memories fade and a prospect of a more durable recovery would see the demands piling up.
The General Election of 1977 had marked the entry to Irish national politics of Bertie Ahern, Mary Harney and Charlie McCreevy. In 1978, a public spending fuelled boom in Ireland resulted in a budget deficit of 17.6% of GDP – a record for developed countries according to IMF, for the period 1970-2008.
Two decades later, the three were in power and in the words of Frenchman Prince Talleyrand about the Bourbons were appropriate: “They have learned nothing and forgotten nothing.”
The real question to ask is what has fundamentally changed?
It would be easy to blame politicians ignoring the fact that a strong conservative mindset continues to prevail.
There is no conservative mindset in Ireland. There is a widespread belief by all that public services can be provided for me fein but paid for by someone else.
There are a number of positives in the narrative so far. The first is that the members of the inquiry, and the public if it it is held in open session, will not have to listen to Stephen Donnelly. The second is that it will be unable to avoid, and may possibly have to confirm, the Taoiseach’s own analysis that “people went mad borrowing”.
A benefit from Stephen Donnelly’s point of view is that he can hardly lose in the esteem in which he is held by a certain sector of the Wicklow electorate, especially in the event of an earlier than expected election.
As to all the presumed overseas culprits for what happened, the inquiry is unlikely to lay a glove on them.
Of course, Ireland is not alone in terms of the Taoiseach’s analysis (which corresponds to the folk wisdom of the country and probably explains the lack of any real interest in getting to the bottom of what happened).
The view of S & P.
The current inquiry is to have as its principal members politicians…thus it will be political.
The coalition have missed a beat here as an _apolitical_ inquiry would have been a much stronger stick to beat FF with.
The current mess is a sign of Gilmore and Kenny’s poor strategic competence
“It should also explore the failure of international monitoring by bodies such as the European Commission, the IMF and the OECD, all of which produced excessively complacent assessments in the years leading up to the crisis.”
A new Commission will be in place; and may be headed by the former chair of the Eurogroup, JC Juncker!
re: S&P note:
S&P argue that debt levels are too high and must be reduced, admonishing the poor attempts made so far to reduce debt. Yet they acknowledge that reducing debt levels will impede growth.
Then we get the usual ” Ultimately, though, growth will remain dependent on net export performance, as domestic demand will face continuous headwinds. ” But every country cannot export its way to growth. Even I can see that.
The we get the now mandatory urge to “sustaining growth-enhancing, but often unpopular, reforms. ” Whatever they are.
Where were S&P when debt levels were being rapidly increased?
If debt levels are high by historical standards, who is to arbitrate between the damage done by reducing those debt levels, and the expediency of leaving the debt levels high? The creditors and S&P on their behalf?
The only part they get right is the following:
“Without a swifter economic recovery and growth in employment, we think popular dissatisfaction could swell. ”
No Joycean genius required to make that observation.
re: The Banking Enquiry:
The biggest banking crash in world history, plays second fiddle to attempting to skewer Fianna Fail before the next election. Of course Fianna Fail deserve to be skewered, again, but so too does any administration that places the skewering of Fianna Fail ahead of a responsible and thorough enquiry into the biggest banking crash in world history.
I don’t think we are capable of carrying out a fundamental or thorough enquiry into the banking collapse. It would strain the National Nerve if the citizens were actually exposed to the sordid reality of Irish banking. Better to reduce it all to a party bun-fight, because that way we can all feel that nothing ever really changes.
DOCM has linked to some interesting, and IMHO, pretty accurate comment by Munchau. He concludes thus:.
‘I am just not sure that investors understand the risks. Nor do they seem to understand the implications of recent EU legislation establishing a new pecking order of who pays how much and in what order when a bank fails. When the house of debt collapses, it is they, not the taxpayers, who come first.’
The reason we won’t have a proper banking enquiry is because it might make bank depositors worry that they could be unwitting bank investors…that wouldn’t do…
In its report, IFAC said significant progress had been achieved by the Government in resolving the fiscal crisis. It noted that if the proposed €2 billion adjustment for Budget 2015 goes ahead, a total of €32 billion will have been taken out of the economy since 2008, making Ireland’s austerity project one of the biggest in global financial history.
The council did, however, express reservations on the three-year time frame proposed to cut the fiscal deficit to zero after 2015, suggesting it was unnecessarily short.
In a separate blow to hopes of tax cuts, the prospect of some relief on the €41 billion in debt associated with bailing out the banks receded yesterday after a senior euro zone official said that the principle of retroactivity is not included in the guidelines for how the euro zone’s direct recapitalisation instrument will work.
“There’s nothing retroactive in the guidelines that we have adopted,” the senior official said ahead of a meeting of euro zone finance ministers on Thursday. “The rules as we have adopted them are forward-looking, so I see no case for retroactive application.”
Double Gold … oops, Treble Gold
biggest bust; biggest bail-in of the citizenry; biggest ordo(neo)liberal austerity experiment
Winston will be thrilled; thrilled, thrilled …
Re: Sharpened Hooks in order to go Fishing
The most important thing for any academic, who is tasked with the challenge of conducting some study, of some kind, into some subject, over the course of a twelve or eighteen month space of time, is to start out with a set of fishing tackle that is most likely to succeed over that given time period.
I mean, all academics know this.
And engineering grads who also happen to have masters level qualifications from places like Massachusetts Institute of Technology, or Harvard, know this better than most.
What is important, given any topic of research, across any field of study, is how one refines the questions that one sets out to answer to begin with. Researchers know this is important. The questions that we design, which we then attempt to approve or disprove, is actually the sharpest tool in our box.
Deputy Donnelly ought to know this better than almost anyone.
And given that at least one person who holds a position on the banking inquiry committee, has advanced understanding about these techniques and methods, . . the largest contribution that that individual can make, . . in the context of an inquiry, is to simply be there, and be available, for the benefit of other members of the inquiry committee who might need assistance to augment their skills in this regard.
Everyone talks about this contribution that deputy Donnelly can potential bring to the banking inquiry committee.
I have no privilege to speak on behalf of deputy Donnelly, or to imagine what the experience of working and living inside the chambers at Kildare street is like.
But if I was someone such as deputy Donnelly, I think the way that I would approach this whole thing, if I were him, I would set out less to try to worry about influence or control of the inquiry by others. What I would do, if I were deputy Donnelly is start from an assumption that the inquiry will either work, or not work, based on the fact that there are members in it, who carry certain skills with them, and those who do not.
It is less a question of numbers of people on a committee. It is more a question of the finite availability of resources and skills, distributed across all members of the committee.
To use an analogy, I would offer the example of the movie, Vertical Limit, made over decade ago about a team of climbers trying to perform a rescue on K2 mountain, in the Himalayas.
It is about the pairing of a strong climber, with a weak climber.
In other words, the work and objective of a member such as deputy Donnelly, is to be there, in order to provide an assistance to the other members of the team, in areas where they are weakest in terms of their skill set.
I know, this is far from being the lofty objective of an inquiry such as this one. But I think it is the best way to make a contribution. The inquiry will either succeed or fail miserably, based on the way in which the capable and the less capable members work together, . . . or aren’t able to work and deploy their resources as a cohesive unit.
It’s like one of these cliches that Woody Allen used to use, eighty percent of success is just showing up.
Terms of reference are all fine and nice. Thesis candidates are always fabulous at setting out what their terms of reference will be, or won’t be. It is the stuff which can become the subject of hours and hours of conversation and coffee drinking.
However, it is converting those terms of reference, into a meaningful set of questions, that are designed like the sharpest of research instruments, is where the real value is added.
I am not deputy Donnelly, and I can’t speak for anyone except myself. But I do know, if I was a member of this committee, I’d worry an awful lot less about the coffee drinking, stages of operations, and I’d set about the task of worrying more so about how I was going to proceed, after all of the coffee and conversation was over.
And that is where you run into the vertical limit, so to speak. Time is what is going to beat you black and blue, in the end. You’ll either come back down from that mountain walking or being carried down. And a lot of it, is about how one organizes resources across the whole team, in terms of pairing of strong climbers with weak climbers.
Deputy Donnelly is kind of the Montgomery Wick, part of this team, if he wanted to make himself available. It’s an awful lot less to do with what the mission is, or is not. It’s an awful lot more to do with the fact, that the little team could just do with the best and the fastest climbers that are available. BOH.
Allowing banks to operate with almost no equity cushions encourages dangerous conduct. Banks are not special, except for what they are allowed to get away with. The problem is bigger than that banks are “too big” or “too interconnected” to fail. It is that they are so complex and so grossly undercapitalised. The model is intellectually bankrupt. The reason that this is not more widely accepted is that bankers are so influential and the economics are so widely misunderstood. Read the book ” The Bankers New Clothes: Whats Wrong with Banking and What to Do About It”by Anat Admati and Martin Hellwig. You will then understand the economics. Once you have done so, you will also appreciate that we have failed to remove the causes of the crisis. Further such crises will come.
The good news is that Deppity Donnelly is to be replaced on the bank inquiry by somebody who will make a worthwhile contribution in Joe Higgins. Young Stephen can go back to filling out his application forms for membership of FF,
There is not much point in shooting the messenger.
For me, the most relevant extract from the S & P paper is the following;
“As an indication of the rate of deleveraging, we have calculated a debt
reversal ratio for each country based on the drop in debt/GDP from its peak until 2013Q4 as a percentage of the increase in debt/GDP leading up to this peak from 1999Q1. For example, as a share of concurrent GDP, the Spanish
corporate sector has reduced its debt ratio by a quarter of the increase that had occurred between the introduction of the euro and the peak. Spanish households, meanwhile, have worked down a quarter of the debt ratio increase since 1999. By that measure Ireland’s private sector has also been able to reduce its debt more than its peers in the periphery, albeit from a much higher level than most. In Portugal, where private sector debt ratios also remain high, much less progress has been achieved, especially in the corporate sector.
It is no coincidence that to date Spain and Ireland have been the only periphery sovereigns upgraded by Standard & Poor’s (other than Greece and Cyprus after their respective defaults), even if their respective ratings remain at least two categories (or six notches) below their pre-crisis peaks. In the same vein we have also taken positive rating actions on several Spanish banks (see “Various Rating Actions Taken On Spanish Banks Following Recent Sovereign Upgrade And More Favorable Economic Prospects”, June 7, 2014).
Nevertheless, since public sector debt has continued to rise across the periphery and remains at peak levels despite the unprecedented fiscal efforts of some governments, as a general matter deleveraging appears to have barely begun.”
That’s it in a nutshell as far as Ireland is concerned i.e. we are chasing Spain in terms of getting back into the euro mainstream. And said mainstream is not in as dire a situation as an increasingly gloomy Munchau seems to think.
Whether we can maintain the chase remains to be seen. Probably yes, IMHO, despite the recent displays of world-class ineptitude by our political leaders. No surprise there!
Donnelly’s position makes no sense. The committee as originally constituted was to have a government majority and while the government probably should have taken Ivana Bacik’s failure to whip on the chin, their action to re-instate the majority means that the status quo prevails. So actually, nothing of substance has changed from the time Donnelly agreed to go on.
As for embarrassing Fianna Fail, given the speed of their electoral recovery – the largest party share of the vote in the recent local elections – I think some embarrassment is clearly required to remind people that the insane policies of their successive governments; the asleep-at-the-wheel behaviour of their ministers – Ahern and Cowen chief amongst them; and the lazy appointments to key public sector positions and the cosy relationships with their pals in property and banking were the key factors behind the crash.
I think Joe would be a great addition to the committee, though it’ll take a strong chairman to prevent every question turning into a speech. He can be a dreadful bore.
@ Stephen Kinsella
This inquiry is now a political mess.
The issue that Stephen Donnelly has put his finger on is the lack of independence of Oireachtas Committees from executive control which is part and parcel of the excessive dominance of our parliamentary institutions generally by the executive.
[One example relating to Oireachtas Committees in this parliament: a couple of years back, then FG TD Peter Matthews proposes inviting the Head of the Central Bank to appear before the Finance Committee. Word comes down from the FG apparatchiks that this intervention is unacceptable. Matthews is then obliged to vote against his own proposal or face loss of the ‘party whip’.]
Our parliamentary committee system is acknowledged as underdeveloped and as conspicuously ‘weak’ by comparison with any counterparts in other western democracies, chiefly due to the control which is exercised over committee membership and operations by Government here. The loss of the referendum on granting extended powers to Oireachtas committees was due, in part, to a public recognition that such powers might amount to providing more grease to Enda’s elbow. So it was: ‘Ah, no thanks – we won’t pay for our own show trials.’
Much of the commentary on this latest debacle suggests ‘mishandling’ by the Government at key stages of the process of appointing members of this special committee. That’s a polite euphemism for the control-freakery, defensiveness, panic, incompetence and blame-shifting which characterise the way in which a series of issues have been approached by Government, of which this is just the latest example.
All that aside, the kindest thing to do might be to kill off this committee as a mechanism to investigate the origins of what brought us to rack and ruin. For one, the committee is now too big – an eleven member committee is too unwieldy to operate efficiently or achieve any coherence in its interrogation of witnesses. Second, its credibility with the public has been undermined by the Government’s own actions and misstatements of recent days. Third, any such inquiry has long since lost the capacity to have any ‘cathartic’ effect with the public as it comes too late in the day. Finally, there is little prospect of any cohesion amongst the committee members from the various parliamentary factions; the seeds of mistrust are already sown. On that level, Stephen Donnelly is well out of it.
But this Government cannot do anything to redeem this debacle-in-the making without admitting it was wrong. As we all know, this government is never wrong. But in its zeal to exercise hegemony over the inquiry, it has lost control over it and things may yet unfold in ways it never anticipated.
I’d like to see the banking inquiry examine the payment of bondholders in 2008-2013.
I’d like the inquiry to examine An Taoiseach’s statement in September 2011 ” If the Anglo bondholders are paid, they will be paid from their own resources. This will not come from the taxpayer”
I’d like the inquiry to establish if the current and previous governments deployed the same legal and economic resources to questioning the payment of bondholders as it is now mounting in defence of the corporate tax rate.
I seriously doubt that these questions will make the terms of reference now that there is a government majority on the inquiry. The government says its members will be impartial, with the implicit corollary that non-government members are NOT impartial. That’s just illogical and insulting to people’s intelligence.
Joe Higgins is emerging as favorite to replace Dep Donnelly. The heart bleeds.
A judge-led inquiry akin to that held by Lord Justice Levenson in the UK is without doubt the best solution to the political debacle.
You cut to the core of the difficulty but the question of what to do about it remains open. I suspect that the “throw the bums out out” syndrome is kicking in; in response to the ” winner takes all” attitude of all concerned i.e. both politicians and electorate. This, to my mind, explains the unstoppable rise of Sinn Féin; and FF!
The only real solution is to embed the role of the opposition in the constitutional arrangements of the country as is the case, for example, in Germany.
cf. this paper culled from the Web on the electoral experience of the province of Ontario.
Meanwhile, on the European front!
What is extraordinary is that that the outgoing Commission in a formal opinion actually endorsed the Spitzenkanddiaten idea. (The proposal that the President of the Commission be directly elected – as long espoused by John Bruton – would be even more damaging to the basic institutional balance of the EU, legal respect for which is the only thing allowing it to continue staggering on; despite the assorted sorcerer’s apprentices attempts – wittingly or unwittingly – to undermine it).
If the Brits leave the EUSSR will there be a debate in Ireland on whether we should follow suit or will we just clap our hands over our ears and plough on regardless?
Sarah Carey makes a valid point. Had the Labour Senator done her job and appeared at the selection Committee the Govt would have a had a majority and Stephen Donnelly would still be on the Committee. Nobody would have raised an eyelid.
However the actions of Enda Kenny in the interim suggest that the political game was going to start in earnest irrespective of the composition of the committee so perhaps Senator Susan O’Keeffe has done us all a mega favour.
Sarah Carey makes a valid point. Had the Labour Senator done her job and appeared at the selection Committee the Govt would have a had a majority and Stephen Donnelly would still be on the Committee. Nobody would have raised an eyelid.
However the actions of Enda Kenny in the interim suggest that the political game was going to start in earnest irrespective of the composition of the committee so perhaps Senator Susan O’Keeffe has done us all a mega favour.
The net effect of all this is that Stephen Donnelly, arguably the best-qualified member of the Dail to sit on the committee, will be replaced by Joe Higgins, who in my view is among the worst-qualified.
Deputy Higgins was on RTE yesterday saying that he would probably submit a minority report if he were to be on the committee. This was even before the terms of reference were settled! This man is some sort of media favourite, but his views on economics and banking are frankly quite risible.
Come back Donnelly, for God’s sake!.
Why is Donnelly the best qualified member of the Dail to sit on a banking committee? Serious question.
The size of the bill to the taxpayer as outlined in a written Dáil reply by the MOF.
Nice to see Cristina Fernandez de Kirchner show more balls than any of our Taoisigh:
@tullmcadoo: Name me a better qualified one, then.
@ Mr Sheehan & Miss McAdoo
I think your conversation proves my point…
@ Mr Singh
I’m with you. Judge led would be preferable to most other forms of inquiry like, for the sake of argument, clown led.
Suggest a book on mentions of “gambling debts” .
Argentina bond burning, Iraq tension, UK v Germany on Juncker…is the calm on the brink?
+1. But it should have happened years ago if the political class were serious about a ‘banking inquiry’.
To be fair to Joe Higgins, throughout the Celtic Tiger era he performed a useful function as a ‘leveller’ of some of the delusional euphoria that emanated from the political rhetoric on all sides. In the current Dail he’s been eclipsed by other performers from the left, such as his former colleague, Claire Daly, and from the centre, by Independents like Stephen Donnelly. As he’s retiring at the next general election, perhaps he views a turn on the banks’ committee as a lap of honour to his parliamentary career? Who knows. Not that it makes much difference anyway to the unfolding shambles…
I never saw how it could possibly have any credibility anyway. Both Fianna Fail and Fine Gael voted for the bank guarantee, and their narrative continues to be that it was necessary. While Labour voted against the guarantee, it is hopelessly compromised by its behaviour since. The squabble between FF and the coalition parties is a distracting side issue.
The only real possibility of a useful outcome is if Stephen Donnelly returns to the committee with a firm resolve to publish a minority report.
I’m confused by all the conspiracy stuff. Everyone is on this three track shriekfest
1. FG is engaged in some kind of cover up! – The committee will be knobbled! It won’t find out anything meaningful because Enda Kenny wants to stop them!!! But why? FG wasn’t in power when the damage was done. They weren’t near power since 1997! Full exposure of the various disastrous decisions is nothing for them to fear. A cover up aides their enemies, not them.
2. They just want to attack FF. It’ll be political Well, it IS political. These were all political decisions, made by politicians. Who got what job. Who hired which consultants. Who was phoned by which ECB banker. Of COURSE FF is going to be in the crossfire.
So which is it?
A committee “knobbled” by a government despite the absence of any obvious motive, or a committee which names names and some of those names will be FnFers, but eh, that’s “political” and therefore bad?
Sarah, I think the working assumption is that FG will use a majority to take the edge off criticism of FG connections, and steer the committee away from avenues that are likely to be unflattering to them. Ie they will aim for a score of FF -8 : FG -0 as opposed to a possible FF -9 : FG -2 which a free ranging inquiry might lead to.
The idea is that they are professional political animals and simply will not be able to resist.
I could select a team to brief a judge led inquiry that it would be difficult to prevent getting to the bottom of the relevant matters.
Fine Gael voted for the bank guarantee, and have been justifying this ever since, so they have an enormous incentive to justify the idea that the guarantee was unavoidable. There will be plenty of stuff.to stick FF with on the macroprudential balls-up and embarrassing details of the path to the guarantee, without having to expose how their own failure as an opposition contributed to the disastrous mishandling of the crisis once it arrived.
“that FG will use a majority to take the edge off criticism of FG connections,”
But what FG connections? Remember: they’d been out of power since 1997. They didn’t HAVE any connections!
On voting for the guarantee: they did so on the basis of assurances by the FF government that it was a liquidity not solvency issue. I think Kenny has already said that Anglo gave them a presentation and everything they said turned out to be rubbish. In other words, he’s already acknowledged they swallowed a lot of crap. The point is: they weren’t on the inside and this was perpetrated by insiders exploiting the fear and decency of politicians – and to be fair, I would include Lenihan in that.
btw – I meant twin track, not three. I think I had a third point and forgot. It might come back to me. The weather has me hot and bothered today 🙂
To me, it’s not credible that the brighter people at the top of FF, FG and the Greens were unaware that they were betting Ireland’s solvency on the future of the Irish property market when they backed the guarantee.
In Ireland the people who find connections useful cultivate them irrespective of the party in power. The go betweens (sometimes known as bagmen) perform the same useful functions for their clientele with whatever party is in power.
You have to get your heads around the fact that there is a tried and trusted system in Ireland that is truly seamless. I think of Paul Robeson and “Old Man River” when I visualise Irish party politics.
An inquiry by Irish politicians into what happened leading up to and during the downfall as we enter the last year before a general election would be worse than useless. The public should be able to recognise what a self serving exercise it would be. At this stage the public is the jury that has been sitting for almost a decade and should be allowed to deliver a verdict through the ballot box.
As they say in Kerry “Inquiry my ass, shooting would be too good for them, slow hanging would be more appropriate.” The ballot box would be the civilised way to discourage incompetence and encourage honesty, transparency, truthfulness and a move toward governing for the common good.
“But what FG connections? Remember: they’d been out of power since 1997. They didn’t HAVE any connections!”
Sarah, just quickly, possible FG connections might include, as just a couple of examples, John Bruton who is obviously heavily involved with the IFSC and Peter Sutherland who on national TV described the idea bank bond holders take a haircut as “unthinkable” and was a director of RBS until being asked to leave when HMG had to bail it out. Both of these people could have had soome influence on the build up to and government reaction to the banking bust either as formal or informal consultees or lobbyists.
Peter Sutherland was on at least one occasion, described in the mainstream press during the height of the financial crisis as “Ireland’s leading economist” and he has been quite an influential character.
There is an American saying.
It is hard to get a man to understand something when his income depends on not understanding it.
All the players knew one thing for sure and that was slowing down or shutting down the tiger would reduce their incomes. Which brings us to, a bird in the hand is worth two in the bush. They milked it fast and furiously knowing it would not last. They also knew the taxpayers would make them whole and no politician or banker would be walking around on their uppers.
What is most upsetting to me is, they gauged public opinion correctly.
You are correct when you say FG were out of power since 1997.
Of the two leading parties which one is in or out of power in Ireland makes not one whit of difference.
They both do the bidding of whoever is rewarding the party in power through campaign contributions, near campaign contributions or favours of one kind or another. All perfectly legal of course.
Keep in mind that the Taoiseach is the Head Waiter, the TDs’ are Waiters and the Public Servants and Regulatory bodies are the Bus Boys.
It would be a big mistake to try to fit Government in Ireland into the US, UK, FR, or DE mold.
Next thread please
Of course. It’s all John Bruton’s fault.
I’ve heard it all now.
I have severe doubts about anything useful coming out of this hobbled comittee.
I just want to bring the Generali Risk manager, fired in 04/2007 back to consciousness (h/t Dorothy Jones)
But I also want to point out, that many people scratch their head about,
how did Timmie Geithner get his Job?
and references up and down from there?
And then thinking, what did e.g. Jörg Asmussen qualify when for what ?
But small change in comparison to
Sarkozy tried to install his 22 something year old son as the head of a multi billion enterprise
Is it worth reminding everyone that FF, FG & SF voted for the guarantee. Only the Labour Party voted against it. SF want us to forget that amongst other things they want us to forget.
Sarah, that is quite a reaction to a suggestion that an inquiry might look into pressure lobbying or influence of people like the two I mentioned.
I didn’t suggest either had been responsible, merely that it might be looked at – and might be something FG would discourage.
Your reaction kind of bears that out and suggests to me the inquiry is already a political football.
Touchy or what!
Yes well, I’m in a bad mood today 🙂 Apologies. I’ll snap out of it.
Look my point is, you can blame a lot of people for what happened here, but I’m sorry, JB is way down the list. It wasn’t the IFSC wot dunnit. As for Suds, well I’m no fan of the Vampire Squid outfit myself, but I’ve seen no evidence yet that he was anywhere near the action.
I honestly don’t see any motive here for FG to cover anything up AND this pre-spin of how it will turn into an unfair attack on FF is obviously coming from oh, gee, I wonder where.
My favourite quote of the crisis is from the fab Colm McCarthy in the Michael Lewis article (even though the ML tourism disaster journalism kinda bugs me, but that’s just me).
McC was talking about the night Paddy Neary went on PT:
|What happened was that everyone in Ireland had the idea that somewhere in Ireland there was a little wise old man who was in charge of the money, and this was the first time they’d ever seen this little man,” says McCarthy. “And then they saw him and said, Who the fuck was that??? Is that the fucking guy who is in charge of the money??? That’s when everyone panicked.”
That fucking guy was put there by a semi-permanent government lazily appointing mediocre people into crucial jobs and setting a policy of “don’t rock the boat”.
Fg has nothing to fear from that being exposed and if names are named, that won’t be a political attack from a bias committee, it’ll be the truth. If the meeja fall for this spin it’ll compound their utter uselessness (and then they wonder why sales are dropping).
ANYWAY, if I was in Our Dear Leader’s office, I’d have advised against the additional appointments. It was a mess up. I’d have said – that’s ok I trust you to get on with the job. If you make a mess of it, don’t go blaming us.
gah! Just wrote lovely comment and all gone. Sigh.
SO, ok sorry for being touchy 🙂 am in bad mood. I’ll snap out of it.
Following might be curt. Just in a rush.
1. It wasn’t the IFSC wot dunnit. I think FG is safe from JB.
2. On the Vampire Squid outfit, I’m no fan for sure, but I haven’t seen any evidence so far that SUDS was anywhere near the crisis, and even if he was our Dear Leader has shown himself to be a man whose willing to cut loose those in danger of causing trouble. Anyway in either case, he owes JB nor Suds anything. Suds presents a serious image problem for FG and JB was not helpful at all during the abortion debate. Both are high up on the dispensable list, even if they were vulnerable, which I don’t think they are.
My favourite quote of the crisis was from Colm McCarthy in the Michael Lewis article (even though the ML disaster tourism journalism bugs me, but don’t mind that)
He was talking about Paddy Neary on PT
“What happened was that everyone in Ireland had the idea that somewhere in Ireland there was a little wise old man who was in charge of the money, and this was the first time they’d ever seen this little man,” says McCarthy. “And then they saw him and said, Who the fuck was that??? Is that the fucking guy who is in charge of the money??? That’s when everyone panicked.”
PN ended up in that job because we had a semi-permanent gov in cahoots with the permanent gov and the public sector unions and all the little establishment cartels which made sure that the worst possible people were in the most important jobs.
THAT is why we ended up in a crisis. FG has nothing to fear, and the pre-spin that the enquiry will be a politically motivated attack on FF is coming from , oh gee, I wonder where. If the media falls for this one, it’ll be pathetic.
In fact, were I an advisor to EK I’d have said – fine – it was a f*ck up, and Bacik deserves a severe dressing down, but let them have it. Let them have whoever they want. Stick on Ross, and Higgins and all the opportunistic show-offs they want. If they mess it up, no one can come crying to us.
But who knows, maybe if all the pre-event spinning doesn’t undermine the work and the committee get on with it, maybe we’ll actually have our moment of watching pensioned ex-civil servants sweating in a chair. That’s what everyone’s really after isn’t it? Or is the determination to drag FG into the blame game, though they were nowhere near the crime, going to overwhelm the lot.
Ok! I’ll risk a little sunbathing and see if my mood becomes sunnier 🙂
have tried to post twice and comment disappears….
right, that one worked. Can’t type this out again.
I’ll snap out of it 🙂 more later. the laptop is hot and bothered too.
the thought police coming …… happens to me as well, in another thread, when pointing out that some “commitee” is a self appointed bunch : – )
Sarah, there is no claim that the IFSC or Sutherland contributed significantly to the financial crisis. An inquiry should be able to look int that though and simply find whatever it finds. That could be that Suds and John Bruton both gave advise that, had it been followed, would have averted the effects of the bubble and bust on Ireland, perhaps behind the scenes for example – who knows.
But I think it is wrong to start from a position that’ right thinking people’ know, just know, there is no point in the inquiry even asking them and their contacts about it, because they were not in government.
Earlier on you asked what the fuss was about. It is about the tendency for political party control (which is being insisted upon, and raises the question, ‘why?’) to steer the inquiry away from looking into certain, perhaps less obvious aspects, which might (or might not) provide FG with some negative publicity.
The inquiry should inquire, without pre-judging what it will conclude.
Many thanks for the timely reminder on SF Tull.
oops -ALL the messages posted. Apologies. Perhaps the moderator will clean it up.
“But I think it is wrong to start from a position that’ right thinking people’ know, just know, there is no point in the inquiry even asking them and their contacts about it, because they were not in government.”
Well maybe some people are starting from there but I’m not saying “don’t ask”. I’m saying that the chances of them having something to hide are slim and none. So their urge to control maybe for any number of reasons, but protecting themselves from embarrassing questions doesn’t seem feasible. Someone will have to come up with a better theory…
The distinguished Irish Independent property columinist has some strong opinions on the banking inquiry;
oh this is a new one.
So, to recap we’ve had.
1. The inquiry is pointless because the government has a majority, even though it was always going to have a majority.
2. The inquiry is pointless because it’ll just blame Fianna Fail (even though they made loads of bad decisions and therefore much of it can be laid at their door)
3. The inquiry is pointless because sure we know what happened anyway.
Someone needs to keep a file of where this pre-inquiry debunking is coming from.
As for the correspondent, my friend was not so lucky in the environs of Grafton St.
From That Indo article.
“Unfortunately the government chose the wrong option in guaranteeing bank deposits, rather than guaranteeing the repayment of loans to banks, which is how the UK had bailed out their banks at proportionately lower cost. Which part of this do the politicians not understand?”
It is revealing that someone pontificating in a national newspaper, after all these years of debate, is still ignorant of the fact that deposits are loans to banks.
Clearly this is proof a proper banking inquiry is required.
Talk about a parade of ignorance!
Is the distinguished Irish Independent property columnist concerned about the central role of the property professionals and valuers in inflating the greatest property bubble in the history of mankind?
A Preliminary Report on the Source of Ireland’s Banking Crisis ” by Klaus Regling and Max Watson-page 6:
“This was a plain vanilla property bubble,compounded by exceptional concentrations of lending to property-and notably commercial property”
When the commercial property bubble burst it bankrupted the entire Irish banking sector,which in turn bankrupted the sovereign.
Reckless Irish banks lent billions against the feudal leases i.e. upward-only rent reviews tied to long leases,not aganist the properties themselves ,and created the greatest commercial property bubble in the history of mankind.
The feudal leases were the collateral not the properties.
In the above link to strengthening civil service accountability-take a look at John Dowds & Allen Morgan’s submission. They make the case that the State is frequently ripped off in property transactions and no one is ever held to account.
Read Colm Keena’s 2001 classic “Haughey’s Millions-Chairlie’s Money Trial”
Haughey dominated Irish political life from the sixties to the nineties. He had always lived beyond his visible means. From 1969 on, he lived like a prince in Kinsealy,at times on nothing more than a backbench TD’s salary. Colm Keena traces the origins of Haughey’s lifestyle back to the 1950′s and to his early life as a partner in Haughey Boland & Co. He follows his early developing relationship relationship with Des Traynor and his developing relationships with property developers.
In this vital book you will discover why Ireland had the greatest commercial property bubble in the history of mankind. Most of Haughey’s bagmen are sovereign landlords. It made them wealthy beyond their wildest dreams and it copper fastened the most draconian commercial property lease law in the world on all Irish commercial tenants. During the credit bubble years,reckless Irish banks lent billions against these feudal leases,not against the properties themselves and created the greatest commercial property bubble in the history of mankind.
So now the bank enquiry knows the source of the greatest commercial property in the history of mankind.