Once upon a time, there was a bank manager. He used to meet his clients personally, lend them money, advise them about their savings and sleep easy at night. So did his clients, happy in the knowledge that their modest nest eggs were safe.
Some citizens had mortgages with their banker or building society. These citizens paid back their mortgages according to agreed rules. The system worked well, partly because it was based on trust.
Sometimes, honest citizens ran into mortgage difficulties. Such problems were usually resolved by sensible solutions, second mortgages or more realistic payback periods. Repossessions were rare. Individual solutions were sought for every problem.
Sometime in the 1980s all that started to change. Bank managers began to be exterminated. Customers' loans became bundled together. Clients became part of big, impersonal packages, bought and sold like herds of cattle. Instead of being individual customers, the citizens became part of a bankers' loan book, or a blip on the balance sheet.
Banks merged. Bank managers became invisible. Citizen clients suffered. Global bankers began the process of deregulation. Bankers became filthy rich as they traversed the world buying up bundles of citizens' loans. Financial products mushroomed to meet the demands of the new banking world. Trading in these products and other corporate finance activity rocketed. Financial markets became casinos as the dealers took command. The end – customer, the citizen, was often forgotten. Banks all over the world trampled on their citizens in pursuit of greed.
Ireland's citizen customers were among the most gullible on the planet. They continued to trust their banks in this treacherous climate. The first sign of bankers' betrayal emerged in the Dirt scandal of the Nineties.
Trusted bank managers advised their clients to break the law, to despatch their money to offshore deposit accounts in pursuit of illegal, tax-free interest. Many, trusting their managers, did their bidding, registered false foreign addresses and defrauded the taxman in a small way. Bank managers got commission. The citizens got jail. Or were named, shamed and fined.
Trust was shattered.
Others found that they had been victims of systematic overcharging, foreign exchange scams, payment protection insurance dirty tricks and other wheezes. These large institutions, built like reassuring fortresses, the citizens' friends, had been secretly betraying them for years. Their trade was treachery.
Treachery worked until 2008 when the world banking frenzy exploded. Irish bankers, with excessive zeal and unmatched greed, went bust from overindulgence. The banks collapsed. Who rode to the rescue? Ireland's betrayed citizens, innocent victims of the boom, bailed the bankers out. The bailout cost them billions.
The citizens were downcast. But there was one glimmer of hope. At least they were now owners of the banks. At least they would never be ripped off again. Their government would ensure that the guilty at the top were removed, that the banks would be nurtured back to good health in new, trustworthy hands and that honest citizens would now be protected in the recovery.
But they soon became puzzled. They had rightly been conditioned to blame the Fianna Fail government and its friends for the contamination of such trusted institutions. Happily the new Fine Gael/Labour brooms were going to stop the rot, restore trust in the banks and eliminate the top brass.
Nothing changed. A few heads rolled, but others were reinstated. The culture remained. While the Government owned only 14 per cent of Bank of Ireland it owned 99 per cent of AIB. Its stake in AIB might just as well have been zero. The two major banks were not being reformed, they were being restored to former glories. The Coalition Government nursed them back to health by indulging them, giving them a free hand. A policy of two "pillar banks" was adopted: Bank of Ireland and AIB must be spoonfed back to health before all others. There was to be no micro-management. On the whole, their excesses were to be tolerated. Competition died as the foreign banks left in despair. A template for a new cartel was being built. The two banks, which controlled over 70 per cent of retail business, were being given a licence for a duopoly. Ireland's citizens stood and stared.
And the policy is beginning to work. The new coalition brooms are nourishing the two banks, fattening them up for a sell-off to anyone that will buy them. In the Dail last week Michael Noonan admitted that he was plotting their return to the private sector.
The minister is in selling mode. He was not just selling the banks. His insistence that the loans of former IBRC mortgage holders should go on the block internationally is a symptom of the continued betrayal of the ordinary decent borrower. Homeowners who borrowed in good faith from Irish Nationwide (now absorbed into IBRC) see their loans being offered like apples and oranges to global buyers. The borrowers are scared stiff that the protections they originally enjoyed will be lost when they fall into the hands of ruthless buyers. Repossessions loom. They are right to be petrified. Neither the liquidator in KPMG nor Mr Noonan appears to see that a 'no holds barred' sale is a breach of trust with the original citizen borrower.
Nor do they see any wrong in dumping Bank of Ireland and AIB into the tender palms of international bankers or financial vultures. When you are in selling mode , citizenship goes out the door. Mr Noonan's denial last week that his preferred timing of an AIB share sale "before a general election" had anything to do with electoral politics jarred a bit. He insisted that he was merely identifying a possible date of spring 2016.
Perhaps, but it would be mighty convenient if the Government had given AIB and Bank of Ireland a clear run at milking the citizen for two years, greeted their sudden profits with enthusiasm, sold them for billions and spent the proceeds on bribing the electorate.
Perish the thought. The present Government will then win the election by spending the proceeds of the sales. The new foreign owners of the pillar banks will grasp the duopoly with open arms. The citizen borrowers will be at the mercy of two new uncontrolled masters. Repossessions will soar. The Government will plead that it cannot interfere with the free market or giant, foreign-owned banks.
Once upon a time there was a bank manager who citizens trusted . . .
Shane Ross is an independent TD for Dublin South