THE NYBERG report has spared the former Fianna Fáil-led government from its most severe criticism of systemic failures of governance in Ireland, according to a source familiar with its contents.
The report of the inquiry into the causes of Ireland’s catastrophic banking collapse was completed last month and its findings will be discussed by Cabinet tomorrow. The commission of investigation was conducted by Peter Nyberg, the former head of the financial markets department at the Finnish ministry of finance.
The report is expected to criticise the “herd mentality” that prevailed in banking and among the regulatory authorities, where there was a strong culture of consensus and where any challenge to this was strongly discouraged.
The investigation is understood to have severely criticised the lack of governance in banks (especially Irish Nationwide Building Society), serious systemic failures and shortcomings in the Central Bank and in the former financial regulator’s office, as well as in the Department of Finance. The inquiry was based on the scoping inquiries last year conducted by Central Bank governor Patrick Honohan and banking experts Klaus Regling and Max Watson.
A copy of the report was sent to the DPP, the Garda Síochána and the Director of Corporate Enforcement, but as no individual is named in the report it did not prejudice any other inquiries.
The reason that the findings spared the political sphere from the same criticism as the banks, regulators and the department, according to the source, was because the other agencies failed to provide politicians with the key on which it was necessary to base a decision.
Fianna Fáil leader Micheál Martin dismissed suggestions from the Government that the previous coalition would face much of the criticism. He said there had been a co-ordinated attempt by Government sources to suggest that Fianna Fáil was to blame for everything.
“Labour and Fine Gael, including Pat Rabbitte and Michael Noonan, knew the state of things before they came into power,” he said. “They were in denial during the election campaign, and said things they should not have said.
“Now that they have to roll back on all of that as they are not in a position to implement what they wanted to do, such as burning bondholders.
“They are orchestrating this new line – that our reputation is not what it should be in Europe, it’s worse than we thought.”
Mr Martin said there was a consensus across Irish politics for 15 years that centred on low taxes and high spending.
“The [Fianna Fáil-led] government takes the lion’s share of responsibility, but it’s not honest to suggest that across the political system there was not that consensus.”
Mr Martin said the report was critical of the regulatory framework in Ireland and Europe, but did not subject politicians to the same degree of reproach.
“The regulators did not do the job, hence there was an unprecedented collapse in banking throughout the world and in Ireland,” he said.
