Leader of bank collapse probe warns this 'will prove expensive'
THE Finnish civil servant who led the inquiry into the collapse of the banking industry here says a generation of bankers is being taught that taxpayers will always pick up the tab for their financial failures.
"We are educating a generation of bankers to believe that we will pay for their mistakes. This will prove expensive for us," Peter Nyberg said at an event in Dublin Castle yesterday.
The Nyberg Report, published last year, made headlines when Mr Nyberg effectively blamed society and the media as well as bankers and regulators for the banking crisis.
Yesterday, he said that instead of governments bailing out banks, the financial institutions should take their losses and their owners and investors should be the ones to put in new capital when it is needed.
Mr Nyberg was speaking in Dublin Castle at the European Ideas Forum, an annual pan-European conference hosted by the Centre for European Studies, the think-tank of the European People's Party, the Europe-wide party to which Fine Gael is affiliated.
Taoiseach Enda Kenny will address hundreds of delegates at the second session of the event today.
Ministers Lucinda Creighton and Brian Hayes both addressed the forum yesterday.
Mr Nyberg was speaking in a panel discussion on the need for stronger economic governance.
There was disagreement on the same panel about the nature of the crisis gripping Europe.
UCD economist Colm McCarthy argued that Europe is in the middle of a banking crisis that has been allowed to spill over to ultimately damage confidence in the ability of eurozone countries to cope with the cost of the banking crisis.
He called for a Europe-wide bank regulation and bank resolution system to end the crisis.
German politician Joachim Pfeifer, a member of Angela Merkel's CDU party, argued however that restoring confidence in Europe would only happen through reform of national governments' budgets.
In contrast to other leading German politicians, Mr Pfeifer indicated his support for Ireland's refusal to move towards a common European corporation tax rate. "We are still 27 countries, we need 27 different approaches for tax," he said.
That theme was taken up by former Taoiseach John Bruton, who argued that competition within the EU on tax rates benefits the union. He also spoke out against French and German moves to introduce a Europe-wide tax on financial transactions.
The Italian vice president of the European Commission, Antonio Tajani, said a "new industrial revolution" was needed in Europe, adding that Ireland was seen by the commission as one of the most attractive locations to business in the world.
"When measured against EU averages, Ireland is well above the norm when it comes to several key supports to entrepreneurship: eg, the percentages of adults who have started a business and who give entrepreneurship a high status; SMEs taking part in EU-funded research; simplicity of export paperwork; and several other important variables."
There was widespread support for the fiscal treaty among speakers and delegates at the event, but also acknowledgement that the treaty would not end the current crisis in the eurozone.