Cowen 'deeply regrets' lack of more restrictive policies

An Taoiseach Brian Cowen has insisted that the Government took action ahead of the banking crisis to reduce the vulnerability of the banks to the property bubble.

“Although I fully accept that, in hindsight, it was not sufficient,” he added.

Mr Cowen said there were lessons to be learned about government policy decisions from two reports published today - one by former International Monetary Fund (IMF) officials investigating the lead-up to the crash and another by the new Governor of the Central Bank Patrick Honohan.

“I agree with the assessment in the reports that more restrictive fiscal policies would have helped in slowing the economy," Mr Cowen said today.

“Hindsight is always clear, and obviously we would have taken such a course if we had known the scale of the property collapse which was facing the country.

“I deeply regret that.”

But the Taoiseach insisted that public money was well spent on roads, public transport, schools, hospitals and third level research facilities, which will help Ireland return to economic growth.

In their report, Mr Regling and Mr Watson outline a number of areas where further investigation is recommended, adding that the most important issues are those that seem to have involved very serious specific breaches of corporate governance.

“It seems important to identify how such very serious governance failures were initiated; how and why internal checks and balances failed in restraining the management of certain banks; whether there were failures of auditorial vigilance; whether supervisors knew of the events (and if not, why not); and why the response of supervisors was not more forceful,” they write.