We owe Bord Snip boss a great deal

COLM McCARTHY has been reviled in certain quarters in recent weeks, but the public may shortly end up owing the economist a great deal.

If Mr McCarthy hadn’t opened his mouth on Monday, an Oireachtas inquiry into the banks might never have been a prospect.

The Department of Finance doesn’t want one, according to government sources. And the politicians didn’t seem in any particular rush to instigate one.

But all that changed within hours of Mr McCarthy appearing on radio on Monday morning.

Mr McCarthy has become a prominent public figure in recent months because of his role in chairing Bord Snip, the group tasked with identifying savings in the public sector. The group’s recommendations – essentially a plethora of cutbacks – ignited a firestorm of controversy, and saw Mr McCarthy heavily criticised.

But he wasn’t on radio to talk about Bord Snip; rather, he was on to discuss NAMA and banking matters generally.

Towards the end of the interview, he lamented the fact that the public had yet to receive a proper explanation of what went wrong in the banks.

“How did the banks themselves get into this mess? The banks have boards – very experienced and distinguished businesspeople in the main – [and] they have senior management, layers of senior management.”

He opined that the banks should be hauled before a televised inquiry to explain what went wrong. He made clear he was not advocating another state tribunal, which would drag on for years and cost millions, but a short, incisive Oireachtas inquiry.

“What I’m thinking more about is something like the DIRT inquiry, where an Oireachtas committee, with bits of it televised on TG4 or whatever, went through line by line what happened when, who made what decisions, why were they made, [and] what was the policy,” he said.

The inquiry wouldn’t save a penny, but it would “greatly enhance” the public’s understanding of what went wrong, he added.

The Labour Party was first out of the blocks on Monday to support Mr McCarthy’s comments, with deputy leader Joan Burton backing the call for such an inquiry.

Fine Gael TD Bernard Allen, the chairman of the powerful Dáil Public Accounts Committee, which carried out the DIRT inquiry in 1999, also backed the call for an inquiry, although he stressed it would have to be subject to cross-party agreement.

Junior coalition partners the Greens jumped on board yesterday morning.

Their finance spokesman, Senator Dan Boyle, said senior bankers should have to “account for the catastrophic failures in their organisations for which we will all have to pay”.

Just for good measure, the Public Accounts Committee then released a formal statement yesterday afternoon saying it would convene in early September “to assess the prospect of the committee holding an inquiry into how Irish banks became so exposed to bad loans”.

That’s bad news for the Department of Finance, which wants this inquiry like a hole in the head.

Government sources cite the workload on the department’s books – the NAMA legislation, the estimates process and the December Budget being the most obvious examples – and say already overburdened staff would be hard-pressed to find time to assist such an inquiry. This is not helped by the public sector recruitment freeze, which means staff leaving the department are not being replaced.

But given the political momentum now building, the department will struggle to fend off such an inquiry.

It is most definitely in prospect now – but that is thanks to Colm McCarthy, not the politicians.

Why is it that in the midst of the most serious banking crisis to hit this State – one for which the taxpayer will end up taking the hit – it took an economist to spell out the need for such an inquiry?

Where were the politicians before Mr McCarthy’s intervention on Monday?

And why are they only seeing the light now, almost a full year since the State stepped in to rescue the banks and expose the taxpayer to potentially massive losses in the process?

At a time when political leadership is needed like never before – and not just in government, but on the opposition benches too – such tardiness is truly, truly worrying.