Cataclysmic failures and a "dangerous consensus" at the top of government, within the political system and at the head of Irish banks, collided to cause Ireland's "race to disaster", a damning new report into the financial crisis will reveal, the Minister for Finance has said.
Michael Noonan yesterday said that the Nyberg Commission report into the banking crisis, which will be presented to cabinet on Tuesday, has found that people in senior positions were discouraged from expressing contrary views and expressing doubt about the course of actions taken by the banks, for fear of damaging their careers.
"Dissent was discouraged, a dangerous consensus approach developed which ultimately caused the race to disaster," Mr Noonan told the Sunday Independent.
It is expected, from what sources say, that the report will deliver a harsh indictment on the previous government's failures to address the crisis, as well as the systematic extent to which "dissent was discouraged" in the banks and within key departments and the Central Bank.
It is expected to single out the Department of Finance, under former minister Brian Lenihan, for particular criticism. Also, it is likely to say key failures in supervision and management within the department meant that policies were often announced but never followed through.
Some of the harshest criticism is to be directed at the Central Bank, for its lack of supervision of the banking sector, its failure to intervene into excessive lending and the hands-off regulatory regime, prior to the crash.
It is expected the report will conclude that a "herd instinct" forced the bigger banks, like AIB and Bank of Ireland, to chase record profits made by Anglo Irish Bank, senior sources said yesterday.
Based on Nyberg's recommendations, Mr Noonan is to create a super "beefed-up" banking division within his department, and will bring in considerable external expertise in the coming months.
It is also likely that a number of banking functions currently carried out by the National Treasury Management Agency will be transferred into this new division.
Once cleared by the Cabinet, the report is likely to be published and debated by the Dail, senior government sources said last night.
The report's publication is set to lead to an exodus of top civil servants within the Department of Finance.
The commission led by former Finnish civil servant Peter Nyberg is expected to stop short of assigning blame to specific individuals.
Rapid-growth policies followed particularly by Anglo Irish Bank and Irish Nationwide where normal controls were over-ridden, are expected to be identified as contributing factors to the crisis.
Anglo Irish Bank's non-executive directors are also to be singled out for criticism for relying too heavily on the views of management.
They are also likely to be criticised for not having adequate banking experience to question the reckless policies being pursued by the bank.
For its part, Irish Nationwide is likely to be criticised for not having ensured sufficient checks and balances were in place.
According to sources, it is expected to conclude there was a prevailing view -- which was not challenged enough -- that property prices would continue rising and that there would be a "soft landing".
Echoing the view of a number of top economists, such as Morgan Kelly of University College Dublin, the report is likely to state that there was a lack of debate across Irish society about the scale and sustainability of economic growth and the property boom.