McWilliams recalls 'nasty attacks' after predicting banking collapse

One of the country’s most high-profile economists was subjected to personal and nasty attacks over his prophetic warnings about an imminent banking crash, he has told an inquiry.

McWilliams recalls 'nasty attacks' after predicting banking collapse

One of the country’s most high-profile economists was subjected to personal and nasty attacks over his prophetic warnings about an imminent banking crash, he has told an inquiry.

David McWilliams, also a columnist and broadcaster, said he was vilified for predicting and regularly cautioning about a looming crisis in the years running up to the country’s spectacular economic collapse in 2008.

The former central banker, who contributes to several Irish newspapers said he was “slapped down” by fellow economists over his gloomy forecasts and accused the media of an “undoubted herd mentality”.

Mr McWilliams said people were “swanning around” now with titles like banking expert who “didn’t open their beak” while living in Ireland in the run-up to the financial nosedive.

Senior bank bosses cautioned him about “dangerous talk” and he was told “don’t frighten the horses”.

But he told the Oireachtas Banking Inquiry in Dublin that editors never “muzzled” him.

Mr McWilliams said it was “very hurtful” when his motives were publicly questioned and he was upset about his wife and mother reading the attacks on him at the time.

“Irish mammies read all that stuff,” he told parliamentarians.

“It was very personal and quite nasty.”

The banking inquiry is currently holding a module into early warnings, divergent and contrarian views during the run-up to the crisis.

Despite his high profile warnings, Mr McWilliams said he was never contacted by anyone in power until the banking meltdown reached boiling point in September 2008.

“Categorically, not one advisor, not one minister, not one civil servant, not one member of the regulator, nobody,” he said, when asked who contacted him.

“In actual fact, I would have been toxic to all of them and they would have avoided me like the plague.

“All this was going on and never once was I asked my opinion about anything, by anybody informally or formally.”

But after meeting then

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They discussed the options in his kitchen, followed by around 10 phone calls and one more face-to-face meeting on October 4.

“I never saw or met him again,” Mr McWilliams said.

“I think he was using me as a sounding board more than anything else.”

His only other official contact was from then Environment Minister and junior coalition partner Green Party leader John Gormley, who telephoned him at the World Economic Forum in China to find out “what was going on”, he said.

“I said I’m in Beijing, you tell me,” he told the hearing.

Mr Lenihan was also telephoning him “asking me all the time what are the foreigners saying”, he added.

“Why didn’t they ring their own bloody advisors instead of me? I never got paid a cent for all this,” Mr McWilliams said.

“Why did they have to ring a bloke in China to find out what was going on under their noses?”

When he asked them about this, their response was that until now everything they had been told was wrong, he said.

After the sporadic contacts over a few weeks he said he heard nothing again from anyone in power.

The commentator said he backed a State guarantee for bank depositors at the time, but only as a temporary measure until Mr Lenihan could find out the full facts about what was going on inside the banks.

A €440bn blanket guarantee was agreed by the then Fianna Fail/Green Party coalition on September 30.

Mr McWilliams said Ireland’s banking crisis was absolutely preventable but the banks staged “a financial coup d’etat” making sure their creditors were paid off while citizens were left miles behind.

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