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Inquiry would clean up past

RIGHTLY or wrongly, the Government's apparent reluctance to launch an inquiry into the roots of the banking crisis, as mooted by the new Central Bank governor Patrick Honohan, can only raise suspicions that there are things it does not want the public to know.

A 110pc loan to the former Minister for Finance Charlie McCreevy to buy a €1.6m 'trophy' apartment in the K Club, which only came to light this week as a result of a 'Prime Time' investigation, inevitably raises suspicions that other interesting things about the financial institutions' activities back in 2006 have not been disclosed.

Mr Honohan is not the only one who would like to see light shone into corners of the recent dark past. Calls for an inquiry have come from the author of the Bord Snip report, Colm McCarthy, from the Consumer Consultative Panel and from the Financial Services Ombudsman.

Oddly, these independent figures believe an inquiry is needed while government spokesmen, such as the Minister for Education Batt O'Keeffe, argue forcefully against it.

Mr O'Keeffe's assertion that an inquiry would hamper the NAMA process and delay the flow of finance from the banks to businesses is patently absurd in light of the recent admission by Eugene Sheehy, former chief executive of AIB, that NAMA will not have any immediate benefit for borrowers next year. We can believe him when he says the sluice gates to credit are not about to burst open any time soon. The banks' first priority will be their own recovery.

As if to add insult to injury, a Department of Finance report has found that banks are refusing more loans to small and medium businesses than they admit. The revelation will come as no surprise to long-term customers who find themselves being refused even modest overdraft facilities.

Another objection to a bank inquiry is that it would be long, drawn out and costly. Not necessarily. It can be a tight, efficient, all-party Oireachtas investigation modelled on the Public Accounts Committee DIRT tax inquiry ten years ago.

Bizarre activities sporadically come to light and suggest that a bigger picture has yet to be revealed. A proper inquiry would join up the dots.

The Taoiseach should grit his teeth and set it in motion.

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