Ireland went over the fiscal cliff in 2005 as a direct result of poor political policies and reckless bank lending, but did not realise the situation until 2008 — when it was no longer a case of whether there would be a crash but how bad it would be.
That was the verdict of the banking inquiry team as it met formally for the last time yesterday to publish its investigation of what caused the economic crash.
Speaking at an hour-long press conference, members said the crash was not caused by any “single event or decision” but rather a series of short-sighted policy decisions, inadequate watchdogs, and reckless bank lending.
Despite all members defending Labour TD and inquiry chair Ciaran Lynch’s view that it is the “best and most comprehensive explanation” of what happened, the decision to spread the blame has come under fire amid claims the inquiry failed to get to the bottom of the crisis.
Fine Gael senator Michael D’Arcy said Ireland had “gone over the cliff” by 2005 due to financial policies and over-zealous bank lending but “just didn’t know”. From then on it was “only a question of how bad” the crash would be — not whether a crash would happen, he said.
Asked whether the guarantee was unavoidable given the evidence uncovered, Fine Gael TD Eoghan Murphy said it is the “wrong question” and that the wider issues are what matter.
Fianna Fáil finance spokesman Michael McGrath admitted his own party made a “fatal error” in failing to properly interrogate bank information on guarantee night, but said the report found that “a lot of people are responsible”, not just one group.
Addressing concerns nobody has been found responsible for what happened, Labour senator Susan O’Keeffe said the inquiry was “never going to be able to make findings of fact against individuals” and was not set up to “replace” the legal system.
Fianna Fáil senator Marc MacSharry said that “sadly this could happen again”.
Independent senator Sean Barrett said that, without improved regulation, “I fear the banks will go right back to the way they were before” — an issue some members privately accept may be difficult to prevent given the lack of any personal blame to anyone for what caused the crash.
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