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€5m bank probe goes on holidays after just two days


Peter Nyberg

Peter Nyberg

Peter Nyberg

The €5m Oireachtas Banking Inquiry will not sit in public again for a month after just two days of hearings.

Amid concerns that it is under severe time pressure to conclude its work before the next General Election, the inquiry will not meet in public until it takes testimony from Central Bank Governor Prof Patrick Honohan on January 15.

Yesterday, the first witness in the long-awaited Banking Inquiry said the probe will uncover little or nothing new on Ireland's multi-billion euro bailout.

Finnish academic Peter Nyberg said he did not believe there would be anything exciting or new uncovered in the parliamentary probe beyond what his commission of investigation found more than three years ago.

Mr Nyberg said the cause of the economic crisis was well known and homegrown, but revealed problems in the banking system should have been spotted as far back as 2006.

However, he maintained there seemed to be little criminality involved, with the excessive risks taken and subsequent losses down to ignorance or a lack of understanding.

"My view then and now is that it is unlikely something really exciting and new will emerge," he said.

For almost four hours Mr Nyberg was quizzed by 11 cross-party politicians in Leinster House, sometimes refusing to "name names" or "go there" based on legal advice.

Its second witness, Canadian expert Peter Wright, will give evidence today before the inquiry rises for four weeks for the Dail Christmas break.

The €440bn 2008 blanket bank guarantee was "a safe decision" by the Fianna Fail-led Government based on the culmination of several years of mistakes being made, but not just by that Government, he told the Oireachtas banking inquiry.

It was followed by the EU/ IMF rescue package that led to austerity budgets.

Mr Nyberg maintained Ireland - like other countries - had been gripped by "real estate mania" in the last decade.

"That doesn't mean that they partied, but it does mean that in the boom and the bubble their lives felt much better than they would have been," he said. The Irish crisis was homegrown, despite the economic crisis in the US, Mr Nyberg insisted.


"Nobody forced the Irish banks to grow, nobody forced the Irish companies or the Irish households to invest or borrow," he added.

The whole conundrum was why nobody ever stopped what was happening, he said, including Financial Regulator.

The academic never asked for the Anglo Tapes or other bank recordings when he compiled a key 2011 report on the State's financial collapse as his probe was running out of time, but he believes they would have added little to his conclusions.

Earlier, Mr Nyberg said that even several months after the guarantee, PWC even concluded the banks had been solvent at the time.

He said the Government assumed the banks were solvent.