Friday 19 January 2018

Suspicions of cover-up will remain without inquiry into financial crisis

Other countries have given their citizens some form of explanation, while the Irish public are kept in the dark, writes Colm McCarthy

Economic meltdown: Former Finance Minister Brian Lenihan was in office at the time of the bank guarantee. Photo: Mark Condren
Economic meltdown: Former Finance Minister Brian Lenihan was in office at the time of the bank guarantee. Photo: Mark Condren
Colm McCarthy

Colm McCarthy

IT is human nature to regard a calamity explained as more acceptable than one whose origins remain obscure or contentious. The financial calamity which struck this country in 2008 and which continues to haunt the economic outlook has gone unexplained.

This infects the public mood at every turn. The fall in economic output since the bubble burst is comparable to the impact of the Second World War in the early Forties. The State's finances have been devastated. Ireland has had to borrow from official lenders, the EU and IMF, for the first time in the history of the State. Emigration has soared and 300,000 jobs have been lost. Small businesses have vanished by the thousand; the banking system, despite a massive State rescue, limps along unrepaired; while 100,000 households have fallen into serious mortgage arrears. Yet the public narrative about what actually happened remains vague and incomplete. This failure of economic governance has been compounded by a failure of explanation and a systematic unwillingness to demand accountability. The result is weakening public support for policy measures which cannot be avoided and declining public faith in political institutions.

The election in February 2011 saw the outgoing government punished severely. Fianna Fail lost three-quarters of the party's Dail seats while the Green party lost the lot. But no grown-up believes that politicians alone were responsible for the mess or that all of their actions and inactions have been explained. Five years on from the financial crash there has been no proper inquiry into the failings at the banks, every single one of which needed rescue. Elected public officials must face the voters but appointed public officials, as distinct from elected ones, hide in the shadows. It is clear that there were regulatory failures and that poor policy decisions were taken. But neither regulators nor policy advisers have been required to take personal responsibility. It is telling that not one of the key participants in the events of the last decade has written a memoir.

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