Preventing another collapse - Corruption laws taking far too long

Next Tuesday, August 9, will be the 10th anniversary of one of the events that toppled the Ponzi scheme we had disastrously regarded as an exemplary way of ordering society.

Preventing another collapse - Corruption laws taking far too long

The world economy — and the Celtic Tiger — fell victim to the same it’s-different-this-time vanity and moral vacuity as Cecil the lion did almost a decade later.

On August 9, 2007, BNP Paribas froze the assets of hedge funds over-exposed to America’s sub-prime mortgage market.

The game was up. Weeks later, there were lines of panic-stricken depositors outside Northern Rock branches across Britain.

To use one of the metaphors that served that implosion made inevitable by look-away regulation so well, the tide went out and those swimming naked had no place to hide.

Another phrase from that lexicon — “a soft landing” — is now shorthand for grand delusion. The promised soft landing became something more like a dog-eat-dog battle for a seat on a Titanic lifeboat. It still is.

The emotional scars endure. This was underlined by the response to the NUI’s decision to confer former taoiseach Brian Cowen with an honorary degree.

Mr Cowen used the opportunity to offer his version of events but he and several of his colleagues will forever be seen as the figureheads if not the architects of the greatest economic mismanagement in the history of this Republic.

The practical consequences linger too. Just yesterday, shares in Permanent TSB fell again, losing almost a quarter of their value in a week. Stockbrokers no longer expect the state-owned bank to pay dividends — which were scrapped at the outset of the financial crisis which led to a €2.7bn injection of taxpayer capital — until at least 2020.

The housing crisis is a child of blind faith in markets too but the €64bn debt incurred to rescue private banks remains the most pressing legacy. Two years ago, servicing that debt, according to the ECB, consumed 37.3% of our GDP, the highest ratio in the European Union.

These details and more like them are well rehearsed, we have almost become inured to the scale of the betrayal, imagining that it will never happen again, that the measures needed to prevent a recurrence have been taken.

Not so. Housing prices are soaring but promises to update legislation to confront bribery and corruption have run into a bottomless pit of sand.

Justice Minister Charlie Flanagan has outlined of the Criminal Justice (Corruption Offences) Bill suggesting the creation of offences dealing with “trading influence”, use of confidential information, and knowingly or recklessly making a payment that would facilitate corruption.

However, any judgment on the bill’s efficacy must be deferred until it is published. This is a tortuous process — details were first published in 2012 but as yet it remains purely theoretical. How can this be in a society still reeling from the 2007 collapse?

All around the world — Russia, China, Poland, Hungary, Turkey, Venezuela, India, and to a lesser extent, America and Britain — democracy is retreating because of issues like this.

If we do not confront them firmly and quickly, the consequences will not just be economic. Get the finger out now.

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