Regulatory sins of the past exposed

Trinity economics professor, Philip Lane, has undertaken a piece of work that will be every bit as valuable in understanding the nature of the recent banking crisis as the unfolding Oireachtas Banking inquiry.

At a presentation organised by the Statistical and Social Inquiry Society of Ireland in the Royal Irish Academy on Thursday, Mr Lane unveiled the most comprehensive account yet of the behaviour of Irish banks in the years preceding the crisis.

One of the main findings, with possibly the most damaging consequences, was the change in funding patterns for the banks from 2003 onwards. They became increasingly reliant on short- term funding. For example, in 2003, the domestic banks were well below the euro area average for bond issuances.