Referendum to empower role of the Oireachtas

THE country will go to the polls later this year in a referendum to give the Oireachtas powers to bring key players in the banking crisis before a committee of investigation.

After the latest report on the financial collapse failed to pin the blame on a single individual or organisation, the Government is pledging a televised committee hearing to get answers.

Finance Minister Michael Noonan said this would require a referendum to “empower committees to investigate matters”.

The constitution must be changed because of the 2001 High Court ruling on a sub-committee hearing into the shooting dead of John Carthy in Abbeylara. The ruling stated that committees did not have the power to make findings of fact that adversely affect the good names of a citizen.

Although a timeframe has not been set for a referendum, it could take place around the same time as the presidential election in November.

Mr Noonan said an Oireachtas hearing might “give closure” on the issue of who was to blame.

He said: “Not only should justice be done, but justice should be seen to be done.

“And when the taxpayers are paying so much to rescue the banks, I think it would be proper that those that are personally culpable would be brought before an Oireachtas and would answer for what they have done.”

In light of the Nyberg report, Mr Noonan said banks would be asked to present board renewal plans and management renewal plans so there is a “fresh start with a new board of directors” in place before 2012.

He said: “So many directors who were in place prior to the guarantee in September 2008 are still in place.

“I don’t hold directors personally culpable for what happened in the banks prior to September 2008. But because it happened on their watch I think they should have moved on.”

The rules will not require legislation but Mr Noonan accepted that moving bankers could lead to legal difficulties.

“We are moving to have a new regime replacing the old regime. But I’m conscious of the fact that there are still people who may have legal entitlements which we’ll find it difficult to disentangle. But we’ll be examining all that,” he said.

The Nyberg report pointed out that those who ran banks and directed banks didn’t have appropriate experience in the areas of risk management or credit.

“There are other skill sets that are important if one is on the board of banks. But certainly, experience in banking would be one that I would expect,” Mr Noonan said.

“In future we can only have directors of banks and people who manage banks who have the absolute competence and experience to do so.”

The department will put together a “pool of appropriate people” from both Ireland and abroad that can be drawn upon to serve as directors in banks.

This will be publicly advertised “so that people who consider themselves suitable for the task can have their credentials assessed by the regulator”, he said.

Mr Noonan also claimed the banking division of his department will become “increasingly independent” and will act as a driver of policy for the banks.