Banking inquiry row before it even gets going

The long-awaited banking inquiry is at the centre of a political row before it even gets under way, with Fianna Fáil warning that the Government wants to keep its scope as narrow as possible for “political advantage”.

The Cabinet yesterday agreed to establish an Oireachtas Committee to inquire into the collapse of the financial system which has resulted in years of hardship for the Irish people.

A nine-person Oireachtas Committee, to be chaired by Labour TD Ciarán Lynch, was proposed by the Government after two senior Anglo Irish Bank executives escaped a jail sentence because the judge believed they were led into “error and illegality” by the State’s financial watchdog.

The Coalition’s preference is to examine events in the run-up to the bank guarantee of September 2008 — when a middle-of-the-night cabinet decision was made that ultimately cost taxpayers €64bn.

But Fianna Fáil wants the inquiry to examine the role of the European Central Bank and its refusal to allow the burning of senior bondholders in bailed-out banks following requests from both the current and previous administrations.

The decision to set up the committee will be voted on in the Dáil next Tuesday.