Banking Inquiry – Are we really learning anything new?

The Banking Inquiry continues to trundle on and fill the column inches. Each witness that comes before the inquiry promises more detail, better insight and the hope that we are going to get something new. However, one has to question if we are really getting anywhere at all?

Of course there is a number of ways to look at these things. The inquiry was always going to be more therapeutic than anything else. In the US and other countries we saw bankers and politicians hauled in for public questioning and we said ‘Oh that would never happen here’. It does happen of course but there is then the feeling that it does no good. Proving a law has been broken and someone is to go to prison is a matter for other bodies. The inquiry is giving us more details but the overall picture is not changing. Do people really care? It is annoying to hear of people who ‘made mistakes’ getting big pensions while you keep their successors off your back as you try to pay you mortgage. Despite this annoyance though we do have to struggle on and most of us have little time to sit and listen to the hours of evidence from the inquiry. We don’t care very much if it’s not going to change anything.

In the media we love a good Inquiry. I won’t deny that. If we didn’t have it I would have to find something else to write about. Inquiries, tribunals, investigations and reports will always be worthy of some praise from us wordsmiths because they give us something to talk about. The banking inquiry was faced with two dangers from the outset. Nothing I have seen so far suggests it is going to avoid either of these. The first was that it was going to become just a political sideshow. Over the last number of years, whether we agree with them, like them or hate them, politicians have been the only ones facing the public. That of course is no more than should be expected. The truth is though that we have been over a lot of ground on who thought what at a political level already. We know who will accuse who of what. We know what the defence will be and we have all pretty much made up our minds on our position. Politicians may make big statements, cause rows, create controversy with what they say but will it really allow us learn anything? Will future governments benefit? Will the public get new material from them that will change opinion? Highly unlikely. If a politician had this then it would already be used in either attack or defence. All they will have is their opinion.

The Inquiry is now set up for a big showdown at a political level with Brian Cowen as the star. He will deny that he over ruled Brian Lenihan. He will probably make some big calls and tough statements but when all the hype dies down will it change anything? We might as well be historians piecing together shreds of evidence to complete a narrative because it interests us. The bankers, the advisors, the officials are coming and going but thus far we are not uncovering too much more. When I wrote ‘Dynasties’ in 2011 I had to cover a synopsis of the guarantee and the bailout in the chapter on Brian Lenihan. It is true to say I was only giving a helicopter view but nothing in the evidence so far would give me cause to revise anything I said in those paragraphs. The point being that a lot of what is said here is actually already known and all we are doing is copper fastening it with the odd note.

The second issue for the Inquiry was that it would be too focussed on the night of the guarantee. It is clear to any observer that this has already happened. That night is fascinating. It is the poster boy for dramatic political nights. It is natural to get sucked in to the story line. Nights like that are rare though. There is already a ton of evidence to say that by the time we got to that night we were already goosed. If we were to learn anything valuable from the banking inquiry then it was far more important to focus on how we got to that night. The years before were the crucial ones. Poor authority by politicians, too much trust, bad regulation, and bad banking practice all led to the situation. Future governments could learn from exactly how this developed, what were the traps, the groupthink and general advice that allowed the situation to grow?

Alas we are only skimming over all that stuff. Politically it’s not as easy score points on it. In terms of news it’s not as exciting as the bank guarantee night. Ian Guider of the Sunday Business Post pointed out that Kevin Cardiff started his evidence from September 2008 and gave little detail as to what happened before. Already the focus on Brian Cowen is what happened that night and if he over ruled Brian Lenihan.

It is good to have this Inquiry. It is helpful. It is not, however, anywhere near as helpful or good as many commentators and politicians think. As we struggle on to pay the bills and put food on the table we give it all only a passing nod. It is providing neither new grounds to rethink our overall positions or escapism from the drudgery that the events concerned inflicted on many of us. In a couple of years we may well remember more from ‘I’m a celebrity get me out of here’ than our current version of ‘I’m a banker, I really shouldn’t be here’

Johnny Fallon
Southern Editor

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  • Chris Jones

    We are learning more outside the inquiry than inside. Watch Greece over the next 2 weeks and realize what good judgement Ireland had

  • Jag

    ” The inquiry was always going to be more therapeutic than anything else”

    Therapeutic for who exactly? The bankers, regulators, media, property people, politicians?

    All the witnesses get the questions beforehand. All the witnesses are allowed submit a statement and read that statement. The Inquiry can’t veer outside the scope of questions already provided in writing in advance to the witnesses. The Inquiry can’t ask leading questions. Following on from Angela Kerins’ gigs before the public accounts in 2013/14 which resulted in ongoing litigation in the Irish courts, politicians have gone out of their way to be polite to witnesses.

    FF wants the Inquiry to conclude FF made the best decision based on available evidence. SF wants the Inquiry to conclude it did not support the guarantee when the legislation came up for enactment. FG and Labour are just concentrating on looking statesmanlike because any conclusion won’t reflect on them.

    Result? People with responsibility for poor decisions which resulted in economic disaster are given a platform to defend themselves and ensure they enjoy a legacy of stature. No new material facts emerge and if you were given a penny for every time witnesses use the Reaganesque “I can’t recall” you’d be rich.

    Oh, and slan leat €5m, the cost of the Inquiry.

  • the rich get richer

    In the South you Learn what Denis O Brien decides that you learn ! ! !

  • aquifer

    We gotta learn and maybe fast. All that quantitative money printing and low interest rates is tending to re-inflate property asset values, but an economic setback could crash it all again. We need banking regulation that reduces big ‘systemic’ risks like that, maybe limiting the possible fraction of property lending. Or just introduce land value taxation? And why is company borrowing tax deductable anyhow? A hidden subsidy for capital in general, but one that makes it more likely that companies will go bust in a slowdown, with further disruption and jobs lost.

  • Sir Rantsalot

    Youre not going to learn anything from the visible government. The banking bailout was ordered by the higher levels of the real world government that is above the media and public knowledge. Inquirys etc will not change the reality that the common man has been robbed in a cycle of financial boom bust that is entirely controlled.

  • Jag

    Whilst in the North, he must be sneakier because he controls (according to a former editor of one of his papers, though legally he owns just 30%) the Bel Tel and Sunday Life (and Sunday World).

  • chrisjones2

    All the witnesses get the questions beforehand. All the witnesses are allowed submit a statement and read that statement.

    SDo what do you want? Witch burnings?

    Perhaps we should call in for cross examination everyone who borrowed more against the growth in their house price and then spent it?

  • Jag

    What do I want?

    I can tell you what I don’t want – €5m of my money spent on telling me the bleedin’ obvious.

    It’s worse though – people who were negligent and/or incompetent are getting a winners-podium-platform to defend their actions, and carve a legacy of stature for themselves, and the clown TDs and senators on the Inquiry are powerless to probe (with just minutes apiece for their questions, it’s easy for witnesses to filibuster and talk down the clock).

    Professor Morgan Kelly once saidthat the billions we injected into Anglo Irish Bank would be as well used if we just burned it on St Stephen’s Green. Ditto with the €5m that we are spending on the Banking Inquiry circus.,

  • amphibious

    Surely the unarguable fact is that the previous government was compromised by their actions with the wild overborrowing for ghost estates? If they were not in danger of exposure then there would have been no problem with letting the private bond holders of private banks doi what they wished with their private commercfial paper when it became worthless?
    Instead we in the Repiblic have had to repay every shyster and belgian dentist via the Troika. Ella, ella, Syriza

  • chrisjones2

    Perhaps …….but so what? Its history now.

    And if some bankers were venial and corrupt well that’s an awful shock. I never would have believed that.If they committed crimes hang them out to dry, prosecute them, throw away the keys

    But the fundamental problem in Ireland as opposed to Greece was an asset price bubble that was allowed to run out of control.

    And the Irish Government in the end took the right decisions on the debt and in the long term is pulling it around. Now if you want an example of what not to do look at Greece

  • chrisjones2

    I wondered why the Bel Tel was so quiet on all this. I could see why Sunday World was – he’d have needed to be associating with a 26 years old with a 38DD+ chest to make the front page there