Whistleblower wants outsider to lead probe
A SENIOR international banking figure should head up any investigation into our banking crisis, whistleblower Eugene McErlean insisted yesterday. Mr McErlean, who exposed overcharging in AIB back in 2001 and 2002, also said that public hearings should be part of any inquiry.
His comments came as the Government proposed that a Commission of Investigation into the banking crisis should report by the end of this year.
"We need a banking expert with the ability to grasp the technicalities of the sector and to ask the right questions of bankers," he told the Irish Independent.
"Public hearings should be part of the enquiry but the first step would be fact gathering by other experts.
"An outsider with international experience would be the best option and it shouldn't be that difficult to find a suitable candidate," he said.
Mr McErlean said a deposit interest retention tax (DIRT)-style investigation could work but strict timelines would have to be adhered to.
The DIRT inquiry, which was established 10 years ago to catch tax evaders, lasted 16 months.
Since the near collapse of the banking sector in 2008, Bank of Ireland and Allied Irish Banks have received a combined €7bn in Government funding and analysts believe they will need billions more.
The Government has also committed a further €4bn to the now nationalised Anglo Irish Bank.
Around €19bn of developer loans will be transferred into the National Asset Management Agency (NAMA) next month, but the true cost of recapitalising the banking sector is still not known.
Mr McErlean said that two red flags should have been addressed by the banks in the run up to the near-collapse of our banking system -- firstly, the massive increase in lending to the construction sector; and secondly, the concentration of those loans on property. He added that Ireland's economic woes have nothing to do with the collapse of investment banking giant Lehman Brothers in 2008 which sent shockwaves through international markets.