Lenihan orders a sweeping review of his own department
Published 23/06/2010 | 05:00
A ROOT-and-branch review of the Department of Finance has been ordered by the Government in the aftermath of two damning banking reports.
The review will focus on the performance of the department over the last 10 years and its management of the current economic and banking crisis.
It could prove potentially embarrassing for former finance ministers such as Charlie McCreevy and Brian Cowen.
The review is expected to delve into the relationship between them and their department officials and the extent to which advice was accepted or rejected during the boom years.
The comprehensive review by independent international experts is expected to examine the inadequacies of the department in predicting the boom to bust and track its record on offering sound economic advice and forecasts.
The review comes on top of the recent critical banking reports by the Central Bank Governor and international experts Klaus Regling and Max Watson and the upcoming banking inquiry. Finance Minister Brian Lenihan last night said he wanted the review completed within a matter of months and signalled it would be made public.
Its publication could pose more questions for Mr Cowen who has already endured a storm of criticism from opposition parties over his tenure as Finance Minister.
The review will ensure the department could in future "better assess risks", Mr Lenihan said. "What I have in mind is that there would be a review of the Department of Finance by an independent review group comprising a small number of experts with relevant international or domestic experience to evaluate the system's structures and processes.
"That would include those used by the department in relation to those elements of economic management that are relevant to its role and operations," he told the Oireachtas committee on finance.
The review will involve a "detailed consideration" of the department's performance in the past 10 years, including its management of the current crisis.
The review would also ensure that "the lessons of this period will inform the development of the department in future", Mr Lenihan said.
"I want to ensure that in the future the department can give the best achievable advice and better assess risks and opportunities in the fiscal and economic and financial system."
The minister stressed the review would take a matter of months, rather than years.
The announcement of a departmental review comes after banking experts Klaus Regling and Max Watson claimed there were limited resources in the Department of Finance for economic forecasting and analysis.
The duo, who were authors of a recent banking report, claimed the International Monetary Fund and the European Commission "failed" Ireland in the boom years by not pointing out the threats to our economy.
Mr Regling said more resources and experienced personnel were now required in the Department of Finance.
"It's not just the number of resources. It's about finding the right people who have the courage to stand up and say the right things," Mr Regling said last week.