FINANCIAL services trade union the Irish Bank Officials’ Association has written to Finance Minister Brian Lenihan calling for a comprehensive inquiry into the causes of the downturn in the Irish banking system in the last year.
This supports a suggestion made by Central Bank chief Patrick Honohan at a Dáil committee yesterday, that a large-scale inquiry, not unlike US Congressional hearings, could be held, availing of expert witnesses and key participants in the crisis.
The call has been welcomed by the Corporate Governance Association of Ireland. Chairman Jerry Kelly said that such an investigation would be very important in order to understand what exactly went wrong and what the lessons are for the future.
Explaining the call, IBOA general secretary Larry Broderick said: “Not only does the general public deserve a thorough explanation, 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.”
Mr Broderick added: “The banking crisis has resulted in a widespread systemic failure — involving not just the financial institutions, themselves, but also the public agencies charged with their supervision and regulation.
“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.
“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,” said Mr Broderick,
He also said serious questions need to be answered regarding the culture operating throughout the banking industry in the period leading up to the crisis.
At yesterday’s committee hearing Mr Honohan, who was named as new governor of the Central Bank in September, said there had been a serious failure in Ireland’s financial regulatory system in recent times and that banks’ lending practices hadn’t been regulated tightly enough.
The IBOA said an inquiry could serve a vital function in helping to establish public policy on the direction of the financial services sector.
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