News Editorial

Sunday 25 September 2016

We need to know why the ECB acted as it did

Published 27/01/2016 | 02:30

Irish citizens deserve to know why and how the banking system failed in all but name and the role that institutions here and in Europe played in that downfall
Irish citizens deserve to know why and how the banking system failed in all but name and the role that institutions here and in Europe played in that downfall

The decision to impose upon taxpayers the burden of supporting banks, while paying senior bondholders in full, is one of the most significant policy decisions undertaken in the wake of the financial crisis.

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The IMF, one of the three wheels of the Troika, has stated in its post-bailout evaluations that Ireland could have saved billions if it had been allowed to "burn the bondholders".

In particular, it has stated that there may have been significant benefits for the Irish public had senior bondholders in the former Anglo Irish and Irish Nationwide banks been burned, noting that alternative policy actions to contain the risks from higher burden-sharing were available but were not pursued.

Indeed, there may have been tangible benefits had those banks even been lightly flambéed by forcing their senior bondholders to share at least some of that colossal burden.

The monumental decision by the ECB not to burn the bondholders in Irish banks, despite political appeals to do so, necessitated not just a compelling rationale. It also required that its internal reasoning be shared at the very least with its Troika partners - the IMF and the European Commission.

Neither the ECB nor the Commission emerges unscathed from a report by the European Court of Auditors - itself an institution whose accountability has been called into question - which criticised the ECB's failure to share its internal analysis on Ireland with its Troika partners.

The refusal by the ECB to share its analysis, citing its independence, makes a mockery of the Troika partnership and raises wider issues about accountability in the eurozone.

Irish citizens deserve to know why and how the banking system failed in all but name and the role that institutions here and in Europe played in that downfall.

They will not gain any real insight from today's Banking Inquiry report and are undoubtedly entitled to feel aggrieved that key European oversight bodies are also seemingly beyond scrutiny.

Speaking words of wisdom, let them bee

People who know about bees are worried about bees, and if these people are worried about bees, we should all be. According to experts, the insects that defy all the laws of aerodynamics to fly about pollinating the plant world have been working in some kind of a loose arrangement with mankind for upwards of 20,000 years.

The day job sees them taking care of the plant kingdom, but a nice side-line they run also gives us honey. So how do we take care of them in return? Not very well by all accounts.

If you go back 20,000 years, you'd find global temperatures more than 20 degrees cooler than today. They give us honey and flowers, and we give them global warming.

That is why a new initiative aimed at saving Ireland's bees, announced by the Heritage Council yesterday, is so welcome.

The so-called Pollinator Plan will tackle pollinator decline. Given that one-third of Ireland's bees are threatened with extinction, this is very good news indeed.

It is regarded as an important step in improving biodiversity. The initiative, which will involve actions on farms and public and private land, deserves to be fully supported.

As about three-quarters of our wild plants require insect pollinators, the bees will be busy, but then again they usually are. Perhaps we should just let them bee.

Irish Independent

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