EUROPEAN CENTRAL BANK:EUROPEAN CENTRAL Bank president Jean-Claude Trichet declined to be drawn yesterday on detailed criticism of the Central Bank of Ireland in the Honohan and Regling reports but said it was clear that lessons must be learned.
Asked whether he was disappointed at the poor performance of the Irish Central Bank in failing to avert the implosion of the domestic lenders, he said central banks and regulators around the world had to up their game.
“One of these reports, if I understand, is written by the Central Bank itself so the Central Bank itself says it can improve. It is the case of all of us to be frank,” he told reporters. “I understand that the reports [that] have been made are lessons to be drawn precisely from events . . . very unfortunately observed in Ireland as they have been observed in a number of other countries.”
Central Bank governor Dr Patrick Honohan, himself a member of the ECB’s governing council, said in his report that that bank, then led by his predecessor John Hurley, had not been alert to warning signs of an imminent crash. There was insufficient awareness or willingness to accept “how close the system was to the edge” and that it was the responsibility of the Central Bank and the regulator to pull it back from the edge, he said.
“Rocking the boat and swimming against the tide of public opinion would have required a particularly strong sense of the independent role of a central bank in being prepared to ‘spoil the party’ and withstand possible strong adverse public reaction.”
Asked whether he concurred with Dr Honohan’s assessment, Mr Trichet said: “It would be difficult for me to say that Patrick is criticising himself but is wrong in criticising – not himself, but what has been done in the past.”
When it was pointed out that Mr Hurley was himself a former member of the governing council led by Mr Trichet, he said: “Lessons have to be drawn and to embark into personalisation doesn’t seem to me to be exactly appropriate.
“Again, we have to improve a system which has proved that it was not sufficiently resilient. It’s true at the global level, as well as at the European level.”
He added: “We have all, of course, in the euro system as a whole take all appropriate lessons from what has happened.
“In any case, the improvement of banking surveillance is a global problem, not only a European problem or a national problem. As you know, we are working very, very actively to improve rules and regulation.”
