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The point of the bank inquiry is not public blood letting - it's to avoid another crisis

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It is important to understand Brian Cowen’s thinking during the crisis. Photo: Steve Humphreys

It is important to understand Brian Cowen’s thinking during the crisis. Photo: Steve Humphreys

It is important to understand Brian Cowen’s thinking during the crisis. Photo: Steve Humphreys

Is our banking inquiry dead before it starts? Ireland's latest inquiry - this time into the banking crisis - has yet to start. It may not be finished in the lifetime of this Government, though right now it is due to report by November 2015.

The inquiry's advisers include some of Ireland's best economists, with international expertise like Manulife's Megan Greene advising on aspects of the crisis.

The inquiry team is well resourced, with a secretariat and appropriate legal advice, and it has the right focus - a long run that begins in the 1990s and leads up to Ireland's exit from the bailout.

The terms of the inquiry have clearly been influenced by economist Colm McCarthy, who has been calling for a long-run viewpoint to the banking crisis. McCarthy is correct to insist on this perspective, and I think we will learn a lot from taking this long-run view.

The inquiry's witnesses will have legal representation and this will certainly slow the process down. The presence of a number of ongoing legal cases in the mix and issues around confidentiality, particularly within the Central Bank, Nama and the Cabinet but also within commercially sensitive private banks, not to mention the obvious problems within the ECB, are all threats to the integrity of the inquiry process.

And that's all before we go anywhere near the politics. Let's be straight about this: every member of Dail Eireann is in re-election mode, and has been since the summer. The appearances of former Taoisigh Bertie Ahern and Brian Cowen as well as a potential appearance by former ECB President Jean Claude Trichet will be as close to party political broadcasts as the inquiry's legal representatives will allow.

There is a reason the people voted not to grant the Dail the power to conduct inquiries that could make finding of fact about individuals. We just don't seem to trust our politicians to do this job. I personally think this is a mistake, and our parliament is poorer for it, but I do see the logic of the people's decision. Regardless, our politicians are constrained in carrying out the process of the inquiry in terms of timing.

But the biggest risk to the integrity of the inquiry are the members of the inquiry itself.

We have a well-resourced, important inquiry with a number of highly credible advisers, very high-profile witnesses, all of whom will be lawyered up, and an election cycle. Fianna Fail will be worried the inquiry will tarnish its chances in the 2016 election (assuming, of course, we don't have one earlier), and the next-largest opposition party, Sinn Fein, will clearly try to position itself as a honest broker in the inquiry process. The internal dynamic of the inquiry's members will be crucial in establishing the credibility of the eventual final report. I wouldn't bet money on whether the report will see the light of day this side of the election. In fact, I'd be surprised if we see it in 2016, given the sheer complexity of the process, the length of time it will examine and the legalistic nature of the examination.

We have had three official reports into Ireland's banking crisis, enough books have now been written to build a wall and we even have a play and a film, 'The Guarantee' - which I recommend - so we are all aware of the facts surrounding the crisis.

That said, the information to be gained from the witnesses will be important. Brian Cowen's thinking during the crisis, his process of decision making and the nature of the relationship between the Irish State and the ECB, all of these will be significant additions to the public information about the banking crisis. The temptation for a public blood letting may be too much for some of our representatives, but assuming they are reasonably well behaved, we should learn a lot.

The regulatory framework which obviously failed will also be very important, although this will not produce headlines, and the need for a different kind of regulation may well emerge in a way it has not previously.

The Honohan report is probably the deepest reflection to date on the regulatory structures within the Central Bank, which subsumed the Financial Regulator after the crisis. But it does not have a lot of detail on where these regulatory structures broke down, both in the long run-up to the crisis, and in its aftermath.

There is the very real possibility that information will surface during the inquiry which will change the direction of the process, either from witnesses or from whistleblowers encouraged to put new information into the public domain.

The need to cover the management of the crisis, the role of regulation and legislation governing Ireland' s banking system, and the ever-present political dimension means that the committee might well get mired in detail without achieving the depth of analysis that is capable given the available expertise and resources.

There are a number of competing concerns the inquiry must solve. The tension between a long-term sweep and detailed analysis, the need to be fair to all witnesses while electoral politics plays out, the overlapping nature of the banking and fiscal crisis, and, of course, the international dimension, all of these must be understood together, and separately. The task in front of the inquiry team is no joke.

The rationale for the inquiry is to understand how the crisis came about in all its facets. But analysis alone won't do the job. Every government department is stuffed with analysis of important issues in forgotten piles and unopened files. Every inquiry has felled forests worth of analysis. Avoiding the next crisis should be the clear objective of the inquiry.

We fail to learn the lessons of the banking crisis at out peril. But this is Ireland, and nothing is ever learned for long.

Irish Independent