Financial Regulator and Central Bank had sufficient powers to protect financial stability, Banking Inquiry finds
The Financial Regulator and Central Bank had enough powers to protect the financial stability of the State but maintained a hands off approach, the banking inquiry has found.
The final report is not due to be released until next week but it is understood that the report also says all of the political parties were following similar policy ideas to those of the Government in the lead up to the economic collapse.
It says that the ‘soft landing’ theory presented to the public by many politicians was never robustly tested or validated.
The Committee of Inquiry into the Banking Crisis is particularly critical of the Financial Regulator and Central Bank who they say failed to identify the systemic risks building up in the banking sector.
According to RTE, the report states the regulator did not take enforcement action between 2000 and 2008 – even when breaches of protocol were found.
It says the banks moved very far from prudent lending practices and in some instances even entered joint ventures with developers.
The European Central Bank maintained in November 2010 and March 2011 that burden sharing would be inappropriate.
ECB head Jean-Claude Trichet told Finance Minister Michael Noonan in March 2011 that a “bomb would go off in Dublin” if burden-sharing took place.
If Mr Noonan had gone ahead with burden-sharing the NTMA estimated that €9.1bn could have been saved for the Irish taxpayer.