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Banking inquiry: Discussion on bank guarantee meeting banned


Labour's Ciaran Lynch will chair the banking inquiry

Labour's Ciaran Lynch will chair the banking inquiry

Labour's Ciaran Lynch will chair the banking inquiry

TDs and Senators investigating the bank system collapse cannot probe the late-night cabinet meeting which sanctioned the €440bn bank guarantee in September 2008.

Legal advisers told the 11 TDs and Senators that the so-called “incorporeal” cabinet meeting, effectively telephone consultation between then-Taoiseach Brian Cowen and his ministers, is off limits because the contents of all cabinet meetings are strictly private under the constitution.

The bank guarantee, which covered deposits up to €100,000 and in theory left Irish taxpayers exposed to €440bn in liabilities, was agreed on September 30, 2008. It followed several hours of meetings with bank bosses at Government Buildings involving Mr Cowen and the Finance Minister, Brian Lenihan.

But legal experts also told the committee that documents related to Cabinet deliberations on the bank collapse can be made available to them.  And it is understood that overall the principle of cabinet confidentiality need not unduly impede the investigations.

The committee tasked with finding out what happened when the entire banking system collapsed in autumn 2008 costing Irish taxpayers €64bn,  agreed a deadline of November 2015 to finalise a report. They held their second meeting at Leinster House today.

Sources said progress was made on agreeing the time period  to be covered by the inquiry though members still have widely differing views about that.

Some members believe the inquiry should begin almost a decade ago when the property price spiral took off, and conclude with how the current Government managed the economic crisis after taking power in February 2011.

But others believe there is no time for such a lengthy process and the inquiry must focus more around the granting of the bank guarantee on September 30, 2008. 

Advocates of this strategy argue that it could still have a wide enough remit and could especially focus on the quality of information given the Fianna Fail-Green Party government at the time.

One informed source said that a detailed inquiry plan will be agreed by the end of the summer.  The committee will begin investigations in September but public hearings are unlikely before early 2015.

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