Taoiseach rules out early probe into banking crisis
Sunday December 27 2009
Taoiseach Brian Cowen has ruled out an immediate inquiry into the causes of the banking crisis on the grounds that holding such an inquiry now could damage confidence in Ireland.
In an interview with the Sunday Independent, Mr Cowen said that while he was not coming to a conclusion on calls for an inquiry, his priority at the moment was to "keep confidence in the country" at a time when the banking system here was being restructured.
Fine Gael and Labour have suggested that the Government is reluctant to set up an inquiry in fear of what may emerge in relation to Fianna Fail's relationship with the banks and the property sector in general.
It recently emerged, for example, that the former minister for finance, Charlie McCreevy, obtained a loan of €1.6m from Irish Nationwide Building Society in 2006 to buy an apartment at the K Club.
At the time, the property was valued at €1.5m. It is now said to be worth around €600,000.
The loan was reported to have been granted by the then chief executive of Irish Nationwide, Michael Fingleton, even though the building society's guidelines at the time did not allow it to grant 100 per cent mortgages.
Mr McCreevy has so far refused to publicly make any comment on the arrangements behind his purchase of the property.
However, sources close to the former EU Commissioner last week maintained: "The loan was based on commercial terms and Mr McCreevy forwarded all relevant details on his earnings."
The source added that it was "hard to see" what Mr McCreevy had done wrong.
It is understood that Mr McCreevy has been an Irish Nationwide customer since 1985.
Sources at the Irish Nationwide have maintained that not alone did the loan comply with the bank's lending policy, but that it was also approved by the board.
But Labour finance spokeswoman Joan Burton has said that disclosures that a number of Fianna Fail figures had access to loans from Irish Nationwide on "easy terms", were "particularly disturbing".
She also claimed that Irish banking, and the economy, had been "laid low by this golden circle".
The question now arose, she said, as to whether or not other figures in Fianna Fail, including figures at senior level, were customers of Irish Nationwide, and whether the institution operated a system of favoured relationships for particular clients.
However, the Taoiseach said: "I'm trying to engender confidence in the system. We're in the midst of restructuring the banking system.
"We've got to keep confidence in the country and in what it is that we're trying to do. The historical issue of how we got here is an issue that will happily be dealt with... but let's deal with that eventually, in due course."
Mr Cowen also said he did not want to "cut across" any of the three investigations already under way in this area which may result in criminal prosecutions.
The governor of the Central Bank, Dr Patrick Honohan, has called for an inquiry into the causes of the banking crisis similar to a US congressional hearing that was held into the 9/11 terrorist attacks on the US.
Former Labour leader Pat Rabbitte has also argued that there is a compelling case for an Oireachtas inquiry into the banking crisis to be initiated.
He said: "As well as learning the lessons that ensure it wouldn't happen again, an inquiry into the banking crisis would be cathartic.
"The public needs to know why one small bank [Anglo Irish Bank] was allowed to grow like Topsy to such an extent that it threatened the entire banking system," said Mr Rabbitte.
"The public also has to find out why the two old-fashioned banks [Allied Irish Bank and Bank of Ireland], that have been there in one guise or another for 200 years, joined the stampede."
Interview
- JODY CORCORAN
Sunday Independent
