Government signals banking crisis inquiry

AN inquiry into the cause of the banking crisis is expected after the Government last night signalled its intention to examine the origins of the collapse.

Following a seven-hour meeting the Cabinet agreed that a statement would be made to the Dáil next week outlining “the appropriate approach to be taken to enquiring into the origins of the banking crisis”.

Taoiseach Brian Cowen said as recently as Monday that an investigation was not a matter of priority. But he left open the possibility that it might be considered at some point in the future.

It was agreed at yesterday’s meeting that Finance Minister Brian Lenihan will draw up a framework document on the Government’s banking strategy and will present it to his colleagues next Tuesday before a statement is made to the Dáil.

According to a Government statement issued last night, ministers discussed “a range of issues in relation to the imperative of restoring a properly functioning banking system, including the obvious need to learn lessons from the events that led to current problems”.

A Government spokesperson said any decision would be “cognisant” of the work being done by the Director of Corporate Enforcement which is investigating Anglo Irish Bank.

Green Party leader John Gormley previously said there was “a need for an inquiry”. A spokesperson for his party in Government said the Greens supported the decision taken by the Government yesterday.

It followed pressure from the opposition and the Governor of the Central Bank, Patrick Honohan, who told an Oireachtas committee last month that an inquiry should be similar to a US congressional hearing into the September 11th attacks.

The Labour Party yesterday published a Bill, to be debated in the Dáil next week, which would give the Oireachtas the power it needs to compel witnesses to give evidence.

It said the Bill would fix a “defect in the law” which has existed since 2002 when a Supreme Court ruling cast doubt on whether the Oireachtas has the power to conduct inquiries into matters of public concern.

Labour finance spokesperson, Joan Burton, said: “People involved in the financial collapse, whether senior bankers, regulators, civil servants or ministers, must be brought before the Oireachtas and compelled to explain their actions or lack thereof.”

Bernard Allen – Chairman of the Dáil’s the Public Accounts Committee – said his, or another committee with “meaningful powers and strong terms of reference” should be given 12 months to carry out an investigation.

Deputy Allen (Fine Gael) strongly criticised the “distinct lack of accountability in the Irish system”.

Meanwhile, the Department of Finance is to get a new secretary general next month.

Kevin Cardiff, an official who “worked closely with the minister in formulating the Government’s response to the crisis” will take over from David Doyle, who is retiring.