Tax policies that led to bank crisis not part of inquiry’s remit

GOVERNMENT decisions and tax policies that fuelled the boom and contributed to the financial crisis will not be examined as part of the banking inquiry.

Despite being found to have played a central role in the crisis by two separate reports published yesterday, fiscal policies pursued by successive Fianna Fáil coalitions are not included in the Government’s draft terms of reference for the Commission of Inquiry. The two reports were commissioned by the Government to establish the terms of reference for the Commission of Investigation – a behind closed doors inquiry which Finance Minister Brian Lenihan said will take six months to complete.

One report – by international experts, Klaus Regling and Max Watson – said the Government’s fiscal policy combined with a lack of financial supervision “left the economy vulnerable to a deep crisis, with costly and extended social fallout”.