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IBOA — The Finance Union welcomes the recent suggestion by UCD economist Colm McCarthy on the need for a public inquiry into what went wrong with the Irish banking system.
Not only does the general public deserve a thorough explanation, but thousands of ordinary bank employees also deserve to know how a substantial failure of leadership in the financial services sector has placed their jobs and livelihoods in jeopardy.
We concur with Mr McCarthy’s suggestion that such an inquiry should be conducted by an Oireachtas committee along the lines of the DIRT inquiry. Although there may be an understandable public desire to find specific individuals to blame, the banking crisis has resulted from a widespread systemic failure — involving not just the financial institutions themselves but also the public agencies charged with their supervision and regulation.
So, if the inquiry were to become unduly focused on the pursuit of scapegoats, it may overlook many of the important wider lessons that must be learned to prevent a recurrence of these events in the future.
It is clear to us, as the organisation representing the ordinary staff working in these institutions, that serious questions have to be answered about the culture operating throughout the banking industry in the period leading up to the crisis. IBOA is on the record for many years of warning that the banking culture which had emerged in the past 10 years or so was a matter of major concern — not only for staff but ultimately for the public good.
Indeed we made a presentation to this effect to the Joint Oireachtas Committee on Finance and the Public Service more than five years ago. It is equally clear that many financial institutions have still to address this issue: the culture is still largely unchanged despite the unprecedented convulsions that have rocked the industry.
There has also been a serious failure of regulation — not only in terms of the operations of the specific agencies charged with this task but also in relation to both the resources and terms of reference underpinning their operations. As the financial crisis is the result of a collective failure, the complex interactions between the various elements which contributed to the failure deserve close scrutiny.
Rather than approaching this task with the sole objective of assigning guilt, it would be far more beneficial to adopt a “truth and reconciliation” model which could encourage all participants to provide the fullest possible testimony. We believe that such an inquiry could serve an essential function in charting the future direction of the financial services sector — expanding the rather narrow focus of the current NAMA debate and including consideration of the role of foreign-owned banks operating in Ireland as well as the activities of Irish-owned institutions.
IBOA has repeatedly called for such an inquiry. Indeed in our submission to the Joint Oireachtas Committee on Finance and the Public Service in 2004, we proposed the creation of a commission on banking to try to achieve a consensus on the future development of our industry. Perhaps if that proposal had been acted upon five years ago, some of the present difficulties could have been averted. However, our experience since then makes us all the more determined to seek a comprehensive framework for a sustainable future for the financial services sector in Ireland.
IBOA is engaged in a major consultation with members in the context of the NAMA debate – with a view to delivering a comprehensive assessment next week on prospects for developing our industry in the best interests of all.
IBOA — The Finance Union
Stephen Street Upper
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