Banks must not get their own way
Brian Cowen and Brian Lenihan were intimidated by the Irish banks, backed up by threats from the European Central Bank.
Enda Kenny and Michael Noonan did not do much better, at first worrying about Europe, then fretting that the future sale of AIB could be adversely affected, then that foreign banks might be discouraged from returning to Ireland to make our market competitive if the government was seen to be tough on the banks.
Now Leo Varadkar and Paschal Donohoe have a new excuse for going easy on the top bankers: the senior executives and board members responsible for the latest banking scandal. They have only to suggest that they might seek legal recourse against their individual client victims, against the Central Bank, or even against the Government itself, and suddenly everyone thinks appeasement is the best policy, and if the banks are treated gently they might just do the right thing.
Those responsible for what might even amount to criminal acts warranting investigation by An Garda Siochana, (as suggested last week by the Independent members of the government) get to slip away, their pockets stuffed with cash. In the summer of 2016, we got a small insight into Irish banking machinations when the courts sent three bankers to jail. But in the context of the scale of what had gone on, we learned little. Within the system, nobody was held to account. Nobody was fired.
At the time, the Dail considered giving the Central Bank extra powers to deal with the banks. Amazingly, the Central Bank said "no thanks." They may have been right, given how little use has been made of existing powers. It is the job of the Central Bank to ensure those in charge of the banks operate to the highest ethical standards - but who can recall anyone being held to that standard?
Now the banks say they will compensate all those with a legitimate claim by Christmas, or by summer at the latest. Of course the banks themselves will first decide who has a legitimate claim and how much to pay in compensation.
The news on Thursday that one victim took the Permanent TSB to court and won, may give heart to others to believe they have a right to stand up for themselves with a chance of success, rather than depending on the dubious goodwill of the banks. It may even stiffen the resolve of the Central Bank and the Government, though one politician, Oireachtas Finance Committee chairman, John McGuinness, thinks our Central Bank is no longer fit for purpose. Brian Hayes, the Fine Gael MEP, believes the EU competition commissioner should investigate if the banks have been operating a cartel.
For now the only real action taken against top bankers is a continued ban on pay increases and bonuses - a useful measure, that hits them in the only place that hurts. Levies or fines will be less effective because they will be passed on to customers.
Unspecified legislation has been hinted at by Mr Donohoe after the Central Bank does its report on Irish banking culture. Things could come to a head sooner than that if settlements offered in December are clearly inadequate. The pressure must be maintained, to ensure that all adversely affected by this disgraceful behaviour are properly compensated without any further unnecessary delay.
Errant bankers should not be left with the mistaken impression that simply, belatedly, doing the right thing now is any kind of trade-off for the retribution they must justly face.