Independent Alliance rebuked over plot to have banks’ assets frozen

Independent Alliance members pictured in 2016.

The Independent Alliance (IA) sought this week to have the assets of the banks frozen and their banking licences revoked over the tracker mortgage scandal, only to be rebuked strongly by Finance Minister Paschal Donohoe, the Irish Examiner can confirm.

In robust exchanges behind closed doors with Transport Minister Shane Ross and junior jobs minister John Halligan, Mr Donohoe warned that they risked “causing a run on the banks” were they to publicly demand such a move.

The stand-off occurred on Tuesday as Mr Donohoe was finalising his meetings with the commercial banks and it has been confirmed that he requested forcibly that they pull back from issuing such a statement.

The Irish Examiner has confirmed that Mr Donohoe was extremely alarmed that two ministers who sit at Cabinet — Mr Ross and Finian McGrath — would publicly express a view that the banks should have their assets frozen or their banking licence suspended and urged them not to.

“Paschal let the two boys have it, and have it hard,” said one minister.

Finance Minister Paschal Donohoe
Finance Minister Paschal Donohoe

The Independent Alliance held a meeting on Tuesday with a view of formulating a statement. It was made clear that Mr Donohoe was deeply unhappy as to their desire to sanction the banks in such a direct fashion and Mr Ross felt it appropriate to delay the issuing of a statement until Wednesday.

“Paschal was pretty clear, he said ‘don’t do this’,” a minister has said. “They were warned this would perpetuate a run on the banks. He told them if you get into the language where you are going to withdraw their banking licence, that has pretty serious consequences for their ability to run.”

Their statement on Wednesday, which called for a criminal investigation to be launched, drew further ire from Mr Donohoe.

While Fine Gael sources have insisted that Mr Donohoe was “sanguine enough” by that stage to realise they needed their say, Independent Alliance sources have stated Mr Donohoe was beside “himself with anger”.

“But we told him, we are the Alliance, we are not Fine Gael and we have to have our say,” said one minister.

However, the IA call for a criminal investigation was shot down by Leo Varadkar yesterday.

Taoiseach Leo Varadkar
Taoiseach Leo Varadkar

He said the Government does not have the authority to instruct the gardaí to conduct investigations, adding that he would not like to live in a country where it did have that power.

The Taoiseach stated that if people believe a crime has been committed or if they have evidence, it should be reported to the gardaí.

“That’s how we deal with crimes in this country,” he said. “The Government doesn’t have the authority to send in the gardaí or the fraud squad and I wouldn’t like to live in a country, quite frankly, where politicians could order in the police or the fraud squad in the way that some people have suggested.”

When pressed that his coalition partners stated they want a criminal investigation launched, Mr Varadkar said: “You have my answer on that. If people believe a crime has been committed, if they have evidence a crime has been committed, well then they should report that to the gardaí.”

MEP Brian Hayes
MEP Brian Hayes

Meanwhile, MEP Brian Hayes has made a complaint to the European Commission’s Directorate-General for Competition in relation to the tracker scandal here.

Mr Hayes has asked the commission to investigate “potential cartel activities” at Irish banks.

Mr Hayes said there are “clear indications” of “collaboration between the banks in order to intentionally deny customers their correct tracker mortgage rate.

“If Irish banks intentionally collaborated to ensure that customers did not get the correct interest rates on their mortgage product, this is effectively an example of controlling rates in an effort to restrict competition in the mortgage market and to share that market.”


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