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Stephen Kinsella: No excuse – it's time to banish vicious feeling we've been had

THE case for a full banking inquiry is unassailable following the publication of the Anglo tapes.

The tapes show senior management actively colluded to understate the estimate of loan losses at Anglo, deliberately exposing the taxpayer to liabilities which would eventually bankrupt the State.

The tapes, in one sense, describe nothing new: we already knew bankers were aware of the possible losses at Anglo, and misled senior policy makers in 2008 as to the extent of the losses. What we didn't know – and still don't – is how common this reprehensible behaviour was across our banking system.

Anglo is the bad boy of Irish banking, but remember it was bailed out with money borrowed by the State at ECB rates. AIB, which swallowed almost as much capital as Anglo, did so at much higher relative cost to the taxpayer.

Were executives at AIB, Bank of Ireland, and other banks, similarly aware of possible losses in their banks around the same time? If so, did they deliberately mislead officials when meeting them over a possible bank guarantee?

Were any officials within the Department of Finance, or the Department of the Taoiseach, similarly aware of a divergence between what the banks were saying publicly and privately at this time?

These and other questions have not been answered. We have had three reports into what happened in the lead-up to the collapse, each giving possible reasons for why the banking collapse happened. Each report has been excellent within its limited terms of reference.

We have not had any satisfactory answers to simple questions revolving around a central theme: who knew what, and when?

Cynics will remark that any banking inquiry will be a Keynesian stimulus for lawyers and achieve nothing.

Much of Irish public life seems to be based around the following cycle: those with power abuse it, weaker people are hurt, someone writes a report which is quietly binned after three days of media furore, and the cycle continues once things calm down.

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That may be the case. But it needn't be. There are now new rules governing how inquiries are to be conducted, and these rules attempt to increase speed of deliberation while limiting cost.

There are also international examples of best practice: the Lehman Brothers report was written in 11 months and is more than 2,000 pages long.

Any US taxpayer can browse its contents and attempt to discover patterns from which they can learn, including who did what, how much they knew, and when. This cannot be said in the cases of Anglo, AIB, Bank of Ireland, INBS, or Permanent TSB.

There is a subtler, and perhaps more important, reason for demanding an inquiry into banking malpractice from 2000 to 2009.

It would finally end the vicious, and corrosive, feeling that we've been had. In the Anglo tapes we hear about the bankers' plan to ensure the Irish taxpayer had "skin in the game" by deliberately underestimating the possible scale of the losses.

As far as I'm aware none of the main protagonists in the collapse of the Irish banking system has had to answer for any possible wrongdoing.

An inquiry would quantify how much skin they have in the game, and how much skin we, the taxpayer they duped, can flay from them through a rigorous inquiry.

Dr Stephen Kinsella is a Senior Lecturer in Economics at the University of Limerick