Brian Cowen: 'I am happy that we did what we did'
Former Taoiseach Brian Cowen has accepted "full and complete responsibility" for his role in the economic collapse.
Back at Leinster House yesterday he opened his testimony to the Banking Inquiry by saying he knows people have suffered.
But he strongly defended the €440bn blanket Bank Guarantee as the most decisive step the government could have taken on the night to deal with the problem. "We had one shot at it," he insisted.
Mr Cowen said that if he and his finance minister Brian Lenihan had made the wrong call, Ireland would have been cast into financial turmoil.
"If we did not get it right, Ireland, we were told, would be set back 25 years," he said.
During more than eight hours of evidence, Mr Cowen said as head of government at the time "I accept full and complete responsibility for my role".
He said that the Irish Government were "on our own" that night and there was no European assistance open to them.
Asked by Fianna Fáil TD Michael McGrath if he accepted that he mismanaged the economy during his tenure at the Department of Finance, Mr Cowen replied: "I don't accept there was mismanagement of the economy by us," he said.
During sometimes fiery and robust exchanges with inquiry members, Mr Cowen did say sorry to the Irish people for the hardship and distress brought about by the decisions he made to tackle the crisis. "I am sorry that the policies we felt necessary to put in place in responding to the financial crisis brought with it hardship and distress to many people.
"The human cost of dealing with this crisis, which we sought to mitigate as best we could, was the most difficult aspect of the decisions we had to make," he said.
Mr Cowen insisted that the Government he led dealt with the financial crisis to the very best of its ability. "I know the crisis brought with it difficulties and problems of all kinds to many people throughout the country," he said.
He said while there was an international dimension to the crash, he accepted that there were failures on the domestic front also. "There's never as much room to manoeuvre in the crisis as some would have one believe," he said.
He agreed with Central Bank Governor Patrick Honohan that the primary responsibility for the crisis lay with the banks themselves.
There was reckless lending by individual banks, made worse by a bonus culture.
Mr Cowen said the €34bn cost of Anglo Irish Bank and Irish Nationwide Building Society would not be recovered but had they collapsed the effect would have been catastrophic.
It was becoming clear since that there was no solution free of risk, he added.
"As minister, I should also have been more doubting, more questioning by challenging the broad consensus of opinion that had developed on these matters," he said.
He also agreed with the conclusions of the Regling and Watson Report that banking practices, governance failings and financial supervision "seriously exacerbated Ireland's credit and property boom".
This had "left the economy vulnerable to a deep crisis and depleted its fiscal and banking buffers when the crisis struck."
Repeatedly, Mr Cowen and Fine Gael TD Kieran O'Donnell clashed over the length of his answers, with Mr O'Donnell repeatedly interjecting when Mr Cowen spoke. "My time is running short," Mr O'Donnell pleaded.
"Please, deputy, it took you five minutes to ask the question," said Mr Cowen, adding: "I will sit here as long as you wish." He asked if Mr O'Donnell wanted a political debate.
Mr Cowen responded sharply to a question from Mr O'Donnell as to whether he felt sympathy for those who suffered.
"Let me say, Deputy, you have no monopoly on upset … or people … seeing people in distress," Mr Cowen said.
The ex-Taoiseach said he was happy to account for his tenure. "I am not trying to shift the blame. I was the guy who was there, I am here to explain," he said.
Brian Cowen on ...
The suffering of the Irish people
"I know the crisis brought with it difficulties and problems of all kinds to many people throughout the country, and as head of the country I accept full and complete responsibility for my role and our response to that crisis ...
"The human cost of dealing with this crisis, which we sought to mitigate as best we could, was the most difficult aspect of the decision we had to make.”
The dangers of hindsight
"Now that we know where we are now, of course I would have a different policy, of course I would. But the policy we had at the time was a policy that was plausible and was backed up by international peer assessment and by domestic commentary here – that’s a fact.
"If we all had time back now ... I’m not suggesting we would have the same policy framework if I knew then what I know now. But no one knew then we were going to have a financial crisis in 2008 ... Anybody suggesting that they did is being intellectually and politically dishonest.
Passing the buck
"While there was an international context to our difficulties there is no doubt there were failures on the domestic front also ... I’m not shifting the responsibility anywhere ...
"There was a lack of analysis by both the Central Bank and Financial Regulator in challenging the over-concentration of risk in property … The emphasis seemed to have been more on the residential housing market than on the commercial property sector and that was a mistake.”
Prof Morgan Kelly
"Professor Kelly’s more pessimistic view proved to be more accurate as we now know, although in his paper he saw the main macroeconomic effect of this as being higher unemployment due to reduced house-building activity as prices fell over the period in question. He states in the paper that he remained of the view that Irish banks were well-capitalised at the time.”
The Galway tent
"There was no big deal. You couldn’t pick a winner in the Galway Races tent, never mind anything else. You’re setting me up as some sort of guy who is promoting cowboy speculators … I don’t travel in those circles.”