IBOA backs call for banking crisis inquiry

The Irish Bank Officials' Association (IBOA) has today welcomed calls for a comprehensive Oireachtas inquiry into what went wrong with the Irish banking system.

IBOA general secretary Larry Broderick has written to the Minister for Finance Brian Lenihan to seek to establish a comprehensive inquiry under the auspices of a Joint Oireachtas Committee set up specifically for this task – pointing out that in assessing recent events, this investigation should also aim to draw important lessons for the future.

"Not only does the general public deserve a thorough explanation," said Broderick, "but thousands of ordinary bank employees also deserve to know how a substantial failure of leadership in the financial services sector has placed their jobs and livelihoods in jeopardy."

The Union leader backed the suggestion by governor of the Central Bank, Dr Patrick Honohan, that such an inquiry should be conducted like a US Congressional hearing - availing of expert witnesses as well as examining the key participants in the events leading up to the crisis.

"The banking crisis has resulted from a widespread systemic failure – involving not just the financial institutions, themselves, but also the public agencies charged with their supervision and regulation – and indeed the political framework within which those supervisory agencies were established," he said.

"So, rather than simply engaging in an exercise in finger-pointing, an inquiry of this kind should also identify the important wider lessons that must be learned to prevent a recurrence of these events in the future."

"It is clear to us, as the organisation representing the ordinary staff working in these institutions, that serious questions have to be answered about the culture operating throughout the banking industry in the period leading up to the crisis,” said Mr Broderick.

"IBOA is on the record for many years warning that the banking culture which had emerged in the last decade or so was a matter of major concern – not only for staff but ultimately for the public good.

"Indeed we made a presentation to this effect to the Joint Oireachtas Committee on Finance and the Public Service over five years ago.

"It is also true that many financial institutions have still to address this issue: the culture is still largely unchanged despite the unprecedented convulsions that have rocked the industry and the transformation in the prevailing economic circumstances.

"There has also been a serious failure of regulation – not only in terms of the operations of the specific agencies charged with this task but also in terms of both the resources and the terms of reference underpinning their operations,” he declared.

"As the financial crisis is the result of a collective failure, we need a comprehensive investigation of the causes which can examine all of the contributory factors. Therefore, the multi-disciplinary approach proposed by Dr Honohan has great merit."