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Banks were 'touts for developers during the boom'

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Dr Elaine Byrne arriving for yesterday's meeting at Leinster House. Photo: Tom Burke

Dr Elaine Byrne arriving for yesterday's meeting at Leinster House. Photo: Tom Burke

Dr Elaine Byrne arriving for yesterday's meeting at Leinster House. Photo: Tom Burke

Bankers acted as touts for developers during the housing boom, the Banking Inquiry has been told.

Author and journalist Frank McDonald described a scene where "frequently it was the bankers who spotted the potential of a well located site" which they would then line up for a developer and provide the loan.

His impression was that there was "no control being exercised at all in relation to the lending of money" by these banks.

Mr McDonald, a former environment editor of the 'Irish Times', referred to the "frenzy" of land rezoning at the time and said he had "no doubt that corruption lay at the heart of Dublin County Council's most contentious land rezoning decisions" and in other local authorities too.

"Otherwise decisions made by elected representatives against the advice of planning officials are almost inexplicable," he said.

Earlier the inquiry was told that whistleblowers should get financial rewards and politicians should be required to publicly disclose their debts.

The recommendations were made by Dr Elaine Byrne, a specialist on corruption, governance and white collar crime.

She said monetary awards for whistleblowers were used in the US and ranged between 10pc and 30pc of the money collected where high-quality information led to enforcement action of over $1m in sanctions.

Dr Byrne also said there was a "culture of deference" between State authorities, political representatives, banks and the property sector and pointed to the "significant increase" in disclosed financial donations to individual politicians in election years.

Fianna Fáil representatives "attracted almost twice as many" of these donations as all other parties combined during the 2002 and 2007 general elections which the party, led by Bertie Ahern, won.

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