THE FIRST inquiry into the Irish banking crisis will name institutions that may have been at fault, but will stop short of blaming individuals.
An Oireachtas committee heard yesterday that the preliminary inquiry, led by German economics expert Klaus Regling, would begin next week. Mr Regling said he would examine the “root causes” of the banking collapse and report to Minister for Finance, Brian Lenihan, before the end of May.
Addressing the Joint Committee on Finance and the Public Service, Mr Regling said that while he and his assistant Max Watson would not have sufficient time to “look at all banking transactions in the past 10 years”, they may want to examine “some very important individual transactions”.
“I’m sure we will identify some failures,” said Mr Regling, describing his brief as establishing what went wrong and identifying problems in the system that may have caused the crisis. When asked if they would name institutions in their report, his colleague Mr Watson replied, “Well yes, I think so.”
He said they would not identify individuals but acknowledged that it may be possible to make “inferences” from the report’s conclusions.
The experts, both of whom have extensive international experience in bodies such as the International Monetary Fund and the European Commission and were appointed by Mr Lenihan, will hold their first meetings with domestic sources next week.
Mr Regling said they would make contact with the “relevant public and private sector bodies”. These will include the Central Bank, the Financial Regulator, research institutions, trade union and consumer representatives.
Speaking after the committee concluded its business, Mr Watson indicated they had yet to decide whether or not to meet former bank chief executives as part of their work. The chief executives of AIB, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent and Irish Nationwide have all changed since the banking sector almost collapsed in 2008.
“We’ll talk to whoever we need to,” said Mr Watson. He told the committee that former ministers for finance and Central Bank governors may fall into this group.
Outside the Republic, the two men will hold a series of meetings with “key international bodies” including the European Commission, the European Central Bank, the Bank for International Settlements and the IMF. Mr Regling confirmed his team’s report would be completed by May and published subsequently.
Another report will be drawn up by the governor of the Central Bank, Patrick Honohan, at the same time. Both reports will then feed into a statutory commission of inquiry in the second half of this year.
The mandate supplied to Mr Regling and Mr Watson limits their inquiry to the period before the end of September 2008, when the Government guaranteed deposits held by Irish banks. It will thus not consider the nationalisation of Anglo Irish Bank, the bailouts of AIB and Bank of Ireland, or Nama.
Fine Gael’s finance spokesman, Richard Bruton, described the banking crisis as “a very deep regulatory failure” and a “bog-standard property bubble”, while his Labour counterpart, Joan Burton, highlighted “many warnings” that were not taken seriously.
Ms Burton described the two men as “two angels on our shoulder”, suggesting they came with “a certain imprint” from the IMF. The charge was rejected by Mr Regling, who said, “for the record, we’re not representing anybody here”.
“We feel very independent,” said Mr Regling, adding that there would be “no secrecy”.
Meanwhile, the Government has announced the membership of an expert committee to give recommendations on ways to help people in debt or mortgage arrears.
Minister for Finance Brian Lenihan said: “This is a committee where we want a realistic engagement between the banks, the Government, the various other interested parties for finding solutions for people.”