Allen: Ministers' handling of crisis should be examined

The Government should consider investigating how ministers and senior civil servants handled the banking collapse, it was claimed today.

Politicians examining state response to the 2008 meltdown said Ireland could learn a lot from the way Icelandic authorities looked into the crippling financial collapse.

The Dáil Public Accounts Committee (PAC) said there were striking similarities between the turmoil in the two nations.

Bernard Allen, PAC chairman, said Icelandic authorities had been determined to get to the root cause of the crisis.

“I believe that our own pending commission of inquiry should consider the template used in Iceland,” he said.

“Our commission of investigation does not seem to include management by Government Ministers and State officials into the collapse in its terms of reference.

“Based on what we saw in Iceland this is something which may be worth exploring.”

Mr Allen added: “There seems to be a determination to address the issues that caused the collapse including the issue of personal culpability on part of those who contributed to the predicament.”

Iceland’s state inquiry into the banking collapse issued a damning verdict of corruption and regulatory negligence.

It named and shamed senior figures for mistakes including David Oddsson, chairman of Iceland’s central bank at the time of the crash, and former prime minister Geir Haarde.

The PAC travelled to Iceland last month to get first hand accounts of the inquiry into the collapse of the country’s three biggest banks in quick succession in 2008. The trip was part of PAC investigations into the Irish crisis.

The Committee said key messages could be taken from the Icelandic situation and applied to Ireland.

Last week the PAC released more than 50 Government documents running to hundreds of pages outlining advice received, meetings held and official views on the state of the banks in 2008.

The papers showed US finance giant Merrill Lynch advised against a blanket deposit guarantee for the six Irish banks but also said there was no right or wrong answer to combat the crisis.

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