Timeline - Missed opportunities to prevent Crisis
Published 28/01/2016 | 02:30
The 'soft landing' theory began to enter the public discussion as early as 2000 but nobody tested the idea, let alone validated it. The failure to take action to slow house price and credit growth is attributed to this shortcoming.
In 2001 there was a proposal by the European Commission to censure the Irish Government for their proposed fiscal strategy - but it was dropped.
The Central Bank & Financial Services Authority of Ireland was set up in an "unnecessary complex" manner in 2003 and led to a "real or perceived" ambiguity in the respective roles of the Central Bank and Financial Regulator.
The Central Bank and Financial Regulator were aware as early as 2003 that the Irish banking sector was placing increasing reliance on lending to the property sector, but neither intervened.
In late 2005 the Financial Regulator was given powers to issue administrative sanction for breaches of lending limits but didn't deal with banks in an intrusive manner.
The Department of Finance relied on the overall assessment of the Central Bank's Financial Stability Reports as the basis for assessing threats rather than responding to specific risks identified in reports.
Stress tests carried out on the banks in 2006 were inadequate.
If steps had been taken to reduce or abolish property tax incentives as planned for 2002 to 2004, the severe overheating from 2003 to 2007 could have been mitigated.