Taoiseach refuses to say if he backs Oireachtas probe into banking crisis

TAOISEACH Brian Cowen refused to say last night whether he believed an Oireachtas probe into the banking crisis was merited.

Mr Cowen is under increasing pressure to support the holding of such an inquiry to determine what went wrong at the banks.

But he has refused to indicate whether he will facilitate the establishment of the inquiry, which could present political difficulties for him.

Mr Cowen was Finance Minister when the property bubble reached its peak and a probe would put key policy decisions he made at the time under intense scrutiny.

The Department of Finance is known to oppose the holding of an inquiry, believing it would divert staff and resources from priorities such as the NAMA legislation and the December budget. The Dáil public accounts committee (PAC), which conducted the successful DIRT inquiry into tax evasion in 1999, will meet next month to assess the possibility of a similar probe into the banking issue.

A spokesman for the Taoiseach last night said Mr Cowen would await the outcome of that meeting and would not be commenting further. “We’ll await the outcome of the PAC meeting at the start of September,” the spokesman said. Because legislation would have to be passed to enable the inquiry, it could not be established without the Government’s support.

Labour leader Eamon Gilmore last night accused Mr Cowen of maintaining a “deafening silence” on the issue. “Given... there is clearly public support for the suggested inquiry, what we... need is a clear statement from the Taoiseach and the Minister for Finance that they will not only support but also facilitate the inquiry with such legislative and logistical support as would be necessary.

“Decisions made by the banking sector, particularly in regard to the financing of property deals, has created an economic crisis of unprecedented seriousness and has the potential to place a financial millstone around the necks of successive generations of Irish taxpayers.

“They are entitled to know who made the key decisions.... They are also entitled to know if the regulatory authorities and successive ministers for finance... discharged their duties in an appropriate manner,” said Mr Gilmore.

This was echoed by the chairman of the PAC, Fine Gael TD Bernard Allen, who accused the department of wanting to “wash its hands” of the issue. Mr Allen said the department and ministers had insisted at the height of the boom the country’s economic fundamentals were sound when external analysis was suggesting this was not the case. The FG TD said “the victims in all of this are young people who have been lured into negative equity”.

“So we need to get to the bottom of who was offering the advice that allowed the property gold-rush continue,” he said.