Decisions on state bailout exempt from banks probe

KEY Government decisions that saw billions of euro of taxpayers’ money used to bail out the banks will not form part of the banking inquiry.

Finance Minister Brian Lenihan rejected claims the bailout had been a “conspiracy” to help bankers and developers. But he similarly rejected suggestions the Government should open up its books to convince the public there had been no conspiracy.

The minister announced details of the two-stage inquiry yesterday, the bulk of which will be done by a commission behind closed doors, a decision that led to opposition claims of a “whitewash”.

Mr Lenihan also said that only matters up to September 2008 would be investigated – the month when the crisis erupted and the Government rescued the banks.

The inquiry’s purpose was to determine the causes of the crisis rather than examine Government’s efforts to solve it, he said.

“Clearly, where the Government made decisions such as the [bank] guarantee, such as the nationalisation of Anglo, the capitalisation of Allied and Bank of Ireland, these decisions were fully debated in the House. I’m fully accountable to the House for them,” he said. “And the idea that there was some kind of a conspiracy – or that the Government should simply open up its own government books and subject itself to a tribunal of inquiry on how it has done its business in government – I would reject that completely.”

The first stage of the inquiry will see two separate reports completed by the end of May, one by the Central Bank governor and the other by an independent expert.

These reports will form the basis for the second stage – a Commission of Investigation sitting in private to examine the issues raised. The commission is due to issue its report by the end of the year and it will then go before an Oireachtas committee.

Fine Gael leader Enda Kenny claimed the format amounted to a “self-protection racket”, while Labour leader Eamon Gilmore claimed it was a “whitewash”.