Officials took back seat in regulation
The Department of Finance was yesterday criticised for not considering itself to be centrally involved in ensuring the financial stability of the State.
Despite its mandate -- as the watchdog for the government finances -- the department didn't see itself as having a "concrete" role in overseeing the banks, the Nyberg report notes.
Neither did it have sufficiently skilled staff to deal specifically with the problems that have beset Ireland's banks.
Peter Nyberg notes that there were formal contacts with the Financial Regulator when preparing the annual Budget and more frequent meetings with the Central Bank.
But it saw itself as preparing legislation to be implemented by the other authorities, and officials appear, according to Mr Nyberg, to have avoided addressing other market issues unless they were raised by the regulator or the Central Bank. He says this was due to the independent status of these authorities.
The department also didn't make any efforts to strengthen its own financial expertise despite EU crisis management exercises showing that it was essential for officials to have these skills.
He concludes that had the department taken more interest in what was happening during the boom it would have been able to make more comprehensive preparations for dealing with the financial crisis.
"It is well documented that the Department of Finance consistently, though not forcefully enough, supported a less expansive fiscal policy, particularly regarding property market incentives," the report says.
Worries were expressed from time to time but nothing came of this.
Mr Nyberg says that it is "vital and urgent" to substantially increase staff with financial market expertise.