The banking inquiry opens: Far, far more than a bank crisis in play

The long-awaited banking inquiry, which opens today, faces huge practical and symbolic challenges. 

It is not overstating matters to suggest that a successful outcome can only be an aspiration but unfortunately that cannot be the expectation.

Legal advice that the inquiry cannot make any adverse findings of fact if they are disputed by those found culpable during or leading up to the crisis seems more limiting than might have been hoped.

These terms hardly seem ideal and undermine the process’ credibility even before opening remarks are made by chairman Ciaran Lynch.

This limitation will stymie the kind of comprehensive report that is needed to show that our political process is capable of standing between the public and the very worst excesses of aggressive, blind-to-the-consequences capitalism.

Because of the 2001 Abbeylara judgment, the 11 inquiry members have been told that each of them will have to attend every session of the public hearings if they wish to make findings of fact against a person.

If the inquiry is to succeed on a practical level it will also need considerable luck, selfless discipline and objectivity from all its members who will have to set aside personal and party objectives.

The hearing will also need enough time to finish its work before a general election is called.

Whether its investigations are challenged in the courts or not will be a decisive factor in that complex equation too.

Symbolically the challenge may be even greater.

The inquiry must show, despite the constraints imposed on it, that our political system can assert authority over a process that for some years seemed out of control and untouchable by regulators, even regulators who realised it was their obligation to impose banking and debt disciplines that might have averted the calamity we are just beginning to escape.

The primacy of our political system may not be quite at stake but a considerable degree of political integrity is in play.

Unless the inquiry can show that politics — our elected representatives, the authority of our democracy — can even momentarily gain the upper hand in the relationship between society and the markets then our battered process of governance will lose even more credibility.

Talks on an EU/US trade deal and OECD efforts to get almost 50 countries to agree a single tax code feed into that narrative too.

The inquiry, and how its efforts to get to the root of the crisis play out, will be as influential as any party manifesto when the election is called.

If it is perceived to be no more than a frustrated, under-powered grievances committee animated by the usual Punch-and-Judy tawdriness then that failure will feed the dissatisfaction that seems likely to elect an extremely divided, almost unworkable Italian-styled parliament.

An inability to inquire properly may in time help lead to a Dáil so divided that it is unable to govern properly.

This inquiry was to have brought some sort of closure to the banking crisis and the recklessness that led to it but the reality is it will just remind us where the real power resides and that our small, isolated political system can only hope to be David to the international financial sector’s Goliath.