Patrick Honohan: ‘Time at the top like walking into a history book’

Central Bank governor Patrick Honohan has described his time at the country’s top financial table during the worst years of the crash as like walking “into a real-life history book”.

And, he has “not ruled out” writing his own chapter on the affair.

Speaking at the launch of the group’s 2014 annual report, which was overshadowed by leaked reports of the 65-year-old’s early retirement, Ireland’s most senior banker said he has a “temptation” to write a book on what happened in the corridors of power between September 2009 and May 2015.

Mr Honohan, best-known for calling RTÉ’s Morning Ireland in November 2010 to contradict government and reveal a bailout was about to take place — confirmed he will retire a year early from his seven-year post in November, joking that he wanted to “slip” the point in after widespread reports of the impending departure.

He said his decision to leave before he needs to is a sign of his confidence in the recovering economy, stressing while the country remains “fragile” the “crisis management” phase he was tasked with overseeing is now over.

The show of faith came as the Central Bank reported a “record” €2.1bn profit last year due to improving economic conditions and the sale of IBRC-liquidation related bonds — meaning the exchequer is set to enjoy a €1.7bn extra windfall.

He said the Government’s €1.2bn to 1.5bn spring statement giveaway on Tuesday may help “structure” general election promises.

He said work still needs to be done to address the mortgage arrears crisis and caused surprise by saying former ECB president Jean-Claude Trichet’s meeting with the banking inquiry on Thursday was “a great day for Irish democracy”.

However, when asked about what qualities Finance Minister Michael Noonan should look for in his replacement, he returned to a relaxed tone, joking “someone with a beard” before adding “or a skirt”.

Economist Brian Lucey continued the colourful selection process by telling RTÉ’s Drivetime that the replacement should not be an insider or a bland “inanimate carbon rod”. He said one of Mr Honohan’s great qualities was that he did not come from a government or banking role, saying previous incumbents effectively allowed the Central Bank to be the “Dame Street branch” of institutions and a “retirement home”.

While the Central Bank governor’s straight-talking nature has been lauded, his early retirement has led to suggestions of difficulties behind the scenes with the Government. However, he rejected the claims saying: “No, no, no, absolutely not,” and insisting his departure is because his work is done. It was echoed by Tánaiste Joan Burton who said he has an “absolutely business-like and professional and amicable relationship with the Government”.

The comments were backed by Taoiseach Enda Kenny, who paid tribute to the “exemplary public service” of Mr Honohan — who took a voluntary €57,000 pay cut while in his €254,048 a year role, in addition to two previous voluntary and mandatory cuts in 2009 and 2010 — during a time of “unprecedented economic turmoil”.

Describing his departure as the “end of an era”, Mr M Noonan said his colleague’s “enduring legacy” will be an economy that is “now beginning to strengthen and grow”.

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Honohan’s straight-talking legacy

by Conall Ó Fátharta

Patrick Honohan became a household name on the day he took to the airwaves to tell the nation that the Government was about to go to Europe for a bailout.

It was an incredible moment. As Government ministers spent the previous days denying that a bailout was imminent, Mr Honohan called RTÉ radio’s Morning Ireland show and told the public what was going on.

Previously a professor of international financial economics and development at Trinity College, Mr Honohan also worked as a senior adviser on financial sector policy at the World Bank.

He was appointed governor of the Central Bank in 2009 by then finance minister Brian Lenihan, with the task of restoring confidence to our beleaguered banks and economy.

His appointment was a break from the tradition of promoting the most senior civil servant in the Department of Finance to the position.

A straight-talker and possessing a sharp wit, he was not afraid of clashing with the Government and in a June 2010 report criticised the Cabinet for its budgetary policies in the run-up to the economic collapse.

His most famous intervention came in November 2010 when he phoned Morning Ireland and told the nation that the Government was about to agree to a bailout of “tens of billions” of euro. He said: “Look, it’s not my call. It’s the Government’s decision at the end. It’s my expectation that this is what is definitely likely to happen.” Ministers had spent days denying a bailout was imminent and fended off accusations the public was being kept in the dark about Ireland’s economic future.

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