Central Bank chief expects inquiry into banking crisis

QUESTIONS remain about how Irish banks lost so much money, according to the Governor of the Central Bank who has said he believes there will be an inquiry into the causes of the recent crisis in the Irish banking system.

Professor Patrick Honohan said: “It is clear that there is going to be some kind of inquiry at some stage” but added that “a witch hunt is no good for anybody”.

The Governor, who was appointed to the position in September, said he does not fully understand how the banks got themselves into their current difficulties which lead the Government to step in with capital assistance and the takeover of bad loans through NAMA.

“There are questions that do remain. How could those two hundred year old banks have got caught up in a situation where they could lose so much money. I don’t fully understand why,” he told The Week in Politics last night.

“Forensic is not the issue here. It is an understanding of society and an inquiry would involve social scientists and a lot of professional expertise, not just a question of hammering at people, at witnesses, across a table,” he said.

Former Group Internal Auditor at AIB and whistleblower, Eugene McErlean, said: “One thing we can be sure of is that there will be another banking crisis at some time in the future and we need to ensure we have the sufficient systems in place to make sure we don’t end up in this mess again.”