The banking inquiry exposed the best and the worst of what public life has to offer.
There was much on which to commend the 11 members of the committee. They put in long, dogged hours to a task that offered zero electoral advantage, and the possibility of public opprobrium.
The chairman Ciarán Lynch performed his function with a steady and firm hand. Contrary to some commentary, the quality of interrogation was often of a high standard.
In particular, Michael McGrath and Pearse Doherty showed themselves to be consistently up to the task. At various times all the other members made contributions of a similar order.
The much tossed around notion that some hot shot senior counsel, practiced in interrogating witnesses, could have delivered a “gotcha” moment is entirely fanciful. What the inquiry really exposed was that there was no “gotcha” moment, just a prolonged period of bad politics, negligible regulation, and reckless trading.
One valid criticism of the committee is that it had too many members, which led to some repetition in questioning. The blame for that lies with the executive as the number was extended from nine to 11 when defections meant that the original complement would not have had a government majority.
It was another example of how Enda Kenny and those around him saw this exercise in terms of how it would serve the government parties rather than the public good and posterity.
What is really damning about the inquiry is that it took so long to get up and running. There is no valid excuse for having to wait eight years for yesterday’s report. Some blame attaches to the judiciary’s interference in parliamentary inquiries dating from Abbeylara in 2001.
Last December, retiring president of the High Court Nicholas Kearns warned of judges being too interventionist in areas where the boundaries of the judicial and executive function intersect. He made particular mention of inquiries.
Since Abbeylara an Oireachtas inquiry can’t make adverse findings against an individual. The electorate had a chance to reverse that decision in 2011, but chose not to. However, it is a major constraint to parliamentary inquiries.
One other sour political note was the failure of all members to sign up to the report. Joe Higgins’ defection is understandable on purely ideological grounds. Pearse Doherty’s decision to jump ship less so.
He claims he couldn’t stand over the final report, but suspicion will linger that he was acting on party orders. With an election looming, Sinn Fin is particularly sensitive not to leave its left flank exposed, and if Doherty had remained on board, the Shinners would have fretted that Higgins’ group might accuse them of so-called establishment politics.
As for the meat of the inquiry, we learned little new but had details coloured in here and there. All of the main parties in the Dáil pursued pro-cyclical policies in the run-up to the crisis, favouring both tax cuts and spending increases. Fianna Fáil, however, as the party in power at the time, bears the greatest responsibility for that recklessness.
The watchdogs were asleep at the wheel. Both the Financial Regulator and the Central Bank could have intervened to put a stop to the reckless lending in banks.
It would have been interesting to explore what might have unfolded if either had acted. Would Bertie Ahern’s government have allowed somebody whip away the punchbowl from the party, telling everybody to go home?
The evidence from Ahern, and particularly Charlie McCreevy, was notable for the lack of awareness either possess about their respective roles in driving the ship of state onto the rocks.
Then we come to the bank directors and executives, who had hoovered up small fortunes through the years of reckless trading. In they trooped, apologies at the ready.
Many were self-serving, but former AIB chair Dermot Gleeson, and the bank’s former CEO Eugene Sheehy appeared genuine in the sense of responsibility they feel for what unfolded. That will be of little comfort to those who have borne the greatest hardship from a recession that was brought on by the banking collapse.
One issue that has not been addressed to any great extent, despite all that has happened, is repercussions for dragging a country to the brink. All of those involved, including politicians, senior public servants, and banking personnel have sailed away from the fallout with iron-clad extravagant pensions and nothing to bother them but their conscience.
There is still no real reason why a bank executive in pursuit of excessive profits should pause to consider whether he or she might be imperilling the country’s future. Despite everything, the culture remains.
The inquiry did throw a little further light on the two big bangs of the crisis — the bank guarantee and the failure to burn the bondholders.
The guarantee is still regarded in many quarters as the worst night in the State’s existence. It was a bad night, no more. The inquiry showed that the guarantee didn’t have to be as wide as it was. Yet as Patrick Honohan pointed out in evidence, there was no magic solution by 29 September, 2008.
Austerity could have been reduced “somewhat but not all that much” according to Honohan if a different course was taken. The real damage was done in the years leading up to the night in question, and particularly the preceding 12 months.
The bondholder issue is another that has loomed large in recent years. The inquiry found that had Brian Lenihan gone ahead and burned bondholders in November 2010 an agreement for the troika intervention in the country would not have been possible.
Lenihan had been told by ECB head Jean Claude Trichet that the Irish take the hit or he’d turn off the funding that was then keeping the banking system afloat. Lenihan wasn’t going to gamble the country’s future by playing chicken with the money men.
Michael Noonan had another cut at it the following March. On that occasion he was told that a bomb would go off in Dublin if he unilaterally decided not to cough up. Again, he wasn’t going to gamble.
Critics say that neither man made a real effort to burn the bondholders. That doesn’t stack up. Some refuse to factor in the reality that by the time the bondholders became an issue the country was on its knees financially and economically.
As far as Frankfurt was concerned, we’d made our own national bed, and, to a certain extent, that was correct. All the evidence at the inquiry suggested that neither Lenihan nor Noonan could be faulted for acting in a conservative manner at a time of huge uncertainty.
The outcome was a grave injustice, but as with other elements of the economic collapse there is plenty of blame to go around, much of it dating from years before the showdowns with the ECB.
This report will not form a huge part of the legacy of the crash. It was good work done despite bad design and severe constraints, including time.
A more appropriate legacy of the whole thing is available on the streets of the State’s cities where rough sleepers bed down, and particularly in dingy hotel rooms warehousing adults and children because they have no homes in which to live.