ANYONE who enjoys black humour, that revealing and cathartic safety valve, will have been tickled by the coincidence that the Hollywood film about the 2008 banking collapse The Big Short reached Irish cinemas in the week our long-delayed and greatly constrained banking inquiry was expected to publish some, but only some, of its conclusions.
It would be very surprising if this report — one of several, coming eight years after the horse bolted — was sensationally revealing. It, like so many of its predecessors, will unfortunately, more than likely, fall into the two-day wonder it-really-makes-no-difference category.
The report’s authors were so constrained and so stymied by individuals’ and institutions’ “right to confidentiality” defences, and a trail long gone stale, that a critical analysis that might have been a rich and filling stew well worth digesting will surely turn out to be pretty thin soup. And cold soup at that.
The Big Short (budget €26m) tells the true story of investors who anticipated the crash of 2008 and made millions by betting on everybody else’s folly. The film illustrates not just the ingenuity of a group of independent thinkers but the stupidity, indifference, and amorality of the financial and political elite. These are more or less the questions that so occupied the banking inquiry (costs to the end of September €4.9m) as it took public testimony from 129 witnesses over 49 days. It is a tragedy for our democarcy that by the time The Big Short features in discussions around next year’s Oscar nominations, our delayed and limited banking report will have fallen from political and public consciousness.
Those who enjoy black humour will also have noted yesterday’s European Court of Auditors’ excoriating report on how the European Commission handled the Irish bailout. They may have silently bitten their lip and passed on the opportunity to mutter something about the blind leading the blind. The report — one far less constrained than our banking inquiry — highlighted the commission’s failure to hear the alarm bells ringing so plainly in the run-up to the financial crisis. In a hard-hitting report the EU watchdog said the commission, like so many others, did not recognise a number of warning, signs including the emergence of high-budget deficits for Ireland, Latvia, Portugal, and Romania. Pointing out that the EC had oversight responsibility for member states’ budgets in the years preceding the financial crisis, the court concludes that “the European Commission estimated the countries’ public budgets to be stronger than they actually turned out to be”. They may well have predicted a soft landing too.
These may seem grey, technical, and remote matters on a stormy January morning but, along with national government’s struggle to tax multinational corporations effectively and put 11th-hour measures to try to contain climate change, they feed into the building narrative destroying confidence in our form and culture of governance. Failure on this scale represents a huge threat to social stability and it would be criminal if the weaknesses highlighted in both reports were not confronted and resolved in the very short term.
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