All you need to know about a banking inquiry
WHAT is all this talk about a banking inquiry? Since the crash in 2008, the taxpayer has been forced to plough €64.1bn into six banks in order to prevent a total collapse of the Irish banking system. Despite a number of inquiries having already taken place, this Government committed to holding a banking inquiry during its lifetime. After much delay, two weeks ago, minister Brendan Howlin cleared the way in terms of legislation for such an inquiry to take place. It is now a matter for the Dail to decide its make-up and which committee will undertake it.
But what will such an inquiry be able to uncover?
Because of a High Court judgement, known as the 2002 Supreme Court Abbeylara judgement, any Oireachtas inquiry will be very limited and most unlikely to make findings. Last year, in a major and impressive report, below, by the Public Accounts Committee, legal advice said, given the present legal quagmire, four legally possible inquiries could be established.
The first is an "inquire, record and report" type of inquiry where no findings or conclusions can be made. This is seen as the most likely.
The second is one where findings can be made, leading to implied blame against individuals. Legal advice to the PAC said this is deeply problematic from a legal standpoint.
Two forms of statutory inquiry are also possible. One is a tribunal and the second is a Commission of Investigation. Tribunals are deeply unpopular given the huge costs seen in the cases of Mahon and Moriarty, and a Commission would need "very carefully framed" legislation, should that be the route chosen.
So if it's a committee inquiry, which committee is likely to undertake the inquiry?
While the PAC has produced its excellent report, given its chairman is Fianna Fail's John McGuinness, politically it is thought the inquiry will be given to the Finance Committee, haired by Labour's Ciaran Lynch. A hybrid committee has also been hinted at.
But what about the court cases that are ongoing in relation to former Anglo Irish Bank executives?
It has already been stated that no inquiry that gets under way can discuss Anglo while such cases are ongoing. Such a scenario means an inquiry could take several years to conclude.
But given there have been previous inquiries and reports (Honohan, Reigling and Watson, and the Wright Commission), what can any new inquiry seek to achieve, given the limitations?
The PAC identified 276 further questions that still require answering in its report, that even a limited inquiry should be able to seek answers to. The PAC identified three main pillars to its proposed inquiry. 1: The bank guarantee, including actions and events prior and subsequent to it. 2: The role of banks in the domestic banking crisis including the role of auditors internal and external, and 3: The role of State Institutions in the domestic banking crisis (Central Bank, Department of Finance and the Financial Regulator).
Even an "inquire, report and record" committee would seek to bring all of the main players including politicians such as former Taoiseach Brian Cowen, civil servants David Doyle, Dermot McCarthy and Kevin Cardiff and top former bankers Dermot Gleeson, Eugene Sheehy, (ex-AIB), Brian Goggin, and Richie Burrows (ex-Bank of Ireland) before them. Such a sight might serve to alleviate some of the public's anger.
But can a committee make such people appear?
At present, only the PAC has the potential to compel people to appear, but any committee formed or selected to undertake the inquiry would obtain the same powers. Once granted, the powers of compellability have the same force as a High Court warrant.
What's the next step?
The commencement order was passed by Government last week. It is now a matter for the Ceann Comhairle's office to establish the standing orders and refer the matter to the Committee of Procedure and Privilege to decide which committee will undertake the inquiry. This move has to be made within 50 days of the commencement order being passed.