Banking Inquiry:

The starting gun for a new Ireland


It’s summer time and the weather is fine. With plenty of community events and festivals in full swing the banking inquiry is possibly the last thing on the minds of Wicklow people right now.

It sure wasn’t on my mind as I enjoyed the flavours, fun and festival feel at last Sunday’s Taste of Wicklow event in the Abbey grounds. But something did strike me – for the first summer in several years people seemed to be more than simply a little bit more sunny-side-up. What could it be? The weather? Nope, there was more to it than simply our annual trademark ‘enjoy while it lasts’ relationship with the weather! There must be something else to explain the welcome pep in people’s step! What on earth could it be?

By the time I had got home, watered the dog and sat down to flick through the papers I had all but forgotten my earlier observations. As I glanced over the week’s news – terrorist attacks in Tunisia and France, the Berkeley student burials and the Greek Euro Exit saga – my eyes stalled in their pursuit and focused on those two sigh-inspiring words: Banking Inquiry.

“It’s showtime as ‘Gang of Four’ to appear at inquiry” locked in my attention from the fading sun. A personality focused piece of journalism – it briefly charted out (in case you or I had forgotten) the traits, motivations and legacies of the most senior ministers of the years leading up to to Banking Crisis. McCreevy, Harney, Cowen and Ahern. Of the four it is the two Celtic Tiger era finance ministers (McCreevy and Cowen) who go before the Inquiry this week. What was interesting about the article – and what light up my observations from earlier that day – was how the author shone the spotlight on the time when Charlie McCreevy departed government for the European Commission; and the motivations for it. In brief, McCreevy had curtailed public spending after the 2002 general election (personally, my earliest recollection of the phrase ‘stealth cut’) and as a result, or so it goes, Fianna Fáil lost council seats in the 2004 elections. Shame on McCreevy the inference; Boarding pass to Brussels the outcome.

The article largely concluded that for all McCreevy’s acts or omissions his movement to Brussels enabled Bertie Ahern (Taoiseach at the time) to dilute the ‘fiscal rectitude’ influence wielded by the Progressive Democrats. Allowing him to replace it with the election winning formula of ‘cutting taxes AND increasing spending’. Annual public spending rose a whopping 21 per cent at one point in the early 2000’s.

Ahern. A ‘political pragmatist’. True he was. And in ways this was a strength of the man as a negotiator on the Good Friday Agreement. But, in the context of our country’s supposed bullet proof tiger economy this pragmatism cost us dearly.

The other article I read focused on the two darkest days of Ireland’s economic crash: the Guarantee (2008) and the EU/IMF/ECB Bailout (2010). The evidence of the former secretary general to the Department of Finance, Kevin Curtin, has set the scene for Cowen’s appearance before the Inquiry this Thursday. Decisions taken on the extent of the guarantee and the nationalisation of Anglo Irish Bank will no doubt grace our TV screens (if the weather doesn’t hold up of course). The Inquiry will churn these facts out. I won’t muddy waters by trying to predict them here.

What is worth addressing right now is the trenchant theme of miscommunication, non-administration and general departmental ‘silo-maneuvering’ at the top level of government and civil service in the period between 2008 and 2010. We now know, for instance, that at least one senior civil servant was examining bail out options for Ireland two years before Patrick Honohan let the cat out of the hat on the RTE news. A day or two later a government press conference confirmed the bailout program. Two years? Why…so…long?

If the Department of Finance (individuals within it, if not collectively) had cause to explore bailout sources (if not bailout terms) surely whatever fiscal concerns prompted that exercise were not being addressed by the banks, Government or the Regulator of the time. If they weren’t addressed, why weren’t they? Because they weren’t even communicated across the silo-maze of state administration?

You’d hope not.

For many the Banking Inquiry will be as newsworthy as the Greek exit developments this week – one from a distant time; the other a distant place. We may shrug our shoulders – as I did when I calmly discarded my questioning of the feel-good buzz at a community event. But here’s the catch: this Inquiry (and the pain we experienced as a people from 2008 onward) will be worth nothing if it’s revelations are not heeded; it’s snag list not rectified. There can be no excuse for regulatory failure or governmental mismanagement in a modern state. Not only do our taxes keep the show on the road; the institutions and processes it funds (administered by those we elect and employ) influence the economy we work and trade within; that money (your money and mine) makes possible the services and supports on which we rely.

It is not enough to simply acknowledge the revelations of the Banking Inquiry (whatever they may be). It’s examination should be the starting gun for a new Ireland; not the closing chapter of a disowned past.

The past and the future. To guard against repeat failure one must inform the other. And not merely through words and a lazy nod of the head; but through actions.

What actions you may ask? Perhaps its too soon to precisely compile the state’s snag list. Here’s a few possibilities however: Greater staffing for the Financial Regulator (payable by whom? Yes, by you and me – but compare that with the cost of a future taxpayer bailout?); Increased restriction, disqualification and other penalties for banking sector directors (Company Law review and amendment – again this will cost money but we need a deterrent where fallout of mismanagement potentially affects so many); Ministerial ability to remove management of banks in any future taxpayer bailout (remember AIB?).

With an election only months away Dáil candidates will promise many things. In truth, this is not entirely their fault – their electoral rivals will do so if they don’t; generations of voters have endorsed short-term and unsustainable measures before. To put it bluntly: precedent is more powerful than memory, even when that memory triggers the pangs of disappointment and anger that engulfed us in 2010.

The only way to get a different result (for me personally, that means something resembling a functional democratic state) is to demand that all parties, alliances and candidates not merely ‘represent’ us, but that they legislate in our collective and long-term interest. Our TD’s will vote on matters impacting on our financial future. Some will point to their party-line (a nod to the supposed wisdom of the whip system – red flag for group-think and mistakes of the past); others will gingerly steer the conversation back to more comfortable ground (local or social issues for instance). No-one has all the answers; there’s no shame in admitting that. But what’s unforgivable is evading questions on the banking sector, taxpayer’s money and the income and living standards of the nation. The stakes are simply too high.