FIANNA FÁIL AND THE BANK INQUIRY : SOME INITIAL OBSERVATIONS
Jan 12th, 2015 by Conor McCabe
Reprieved! Reprieved! I was sure of it.
When you’re most despairing
The clouds may be clearing.” The Threepenny Opera.
Patrick Honohan, the governor of the Central Bank of Ireland, will be before the Bank Inquiry committee this week to talk about his 2010 report into the crisis.
We will be able to hear his explanation as to the conclusions he drew with regard to the role of the Financial Regulator and Central Bank in the years leading up to, and after, the 2008 bank guarantee.
It will also give us a chance to get more of a sense as to where each of the main parties is coming from with regard to the inquiry - the approach they have taken and the analysis that informs their questioning.
In the case of Fianna Fáil, the analysis which underpins their questioning seems to be based upon two main points:
1. The Guarantee decision was taken under enormous pressure and one to which there was no realistic alternative
2. The ECB has questions to answer with regard to blocking any haircuts imposed on bondholders especially from 2010 onward.
For example, this video clip here has these points being raised by Michael McGrath and Darragh O’Brien:
By way of contrast, have a look at this clip of Eoin O’Broin on the Vincent Browne Show, where he argues that the collapse of Northern Rock in September 2007 marked the beginning of the debate within government and state circles as to whether a similar event could happen here.
In other words, the bank guarantee should not be seen purely in terms of the actual night itself (a point acknowledged by Senator O’Brien in the previous clip) - it needs to be seen the context of almost a year of debate and analysis taking place within the Central Bank, Dept, of Finance, Financial Regulator’s office and the Office of the Taoiseach.
With regard to this debate we are still unclear as to its shape and direction, and it is one of the purposes of the Bank Inquiry to throw some light on what happened in the twelve months prior to the guarantee decision.