IBOA backs call for major inquiry into banking crisis
Issued : 16 December 2009
IBOA The Finance Union has welcomed the comments by the Governor of the Central Bank, Dr. Patrick Honohan, on the need for a comprehensive Oireachtas inquiry into what went wrong with the Irish banking system. The Union’s General Secretary, Larry Broderick, has already written to the Minister for Finance, Brian Lenihan, to seek to establish a comprehensive inquiry under the auspices of a Joint Oireachtas Committee set up specifically for this task – pointing out that in assessing recent events, this investigation should also aim to draw important lessons for the future. “Not only does the general public deserve a thorough explanation,” said Larry Broderick, “but thousands of ordinary bank employees also deserve to know how a substantial failure of leadership in the financial services sector has placed their jobs and livelihoods in jeopardy. The Union leader backed Dr. Honohan’s suggestion that such an inquiry should be conducted like a US Congressional hearing availing of expert witnesses as well as examining the key participants in the events leading up to the crisis. “The banking crisis has resulted from a widespread systemic failure – involving not just the financial institutions, themselves, but also the public agencies charged with their supervision and regulation – and indeed the political framework within which those supervisory agencies were established,” he said. “So, rather than simply engaging in an exercise in finger-pointing, an inquiry of this kind should also identify the important wider lessons that must be learned to prevent a recurrence of these events in the future.” “It is clear to us, as the organisation representing the ordinary staff working in these institutions, that serious questions have to be answered about the culture operating throughout the banking industry in the period leading up to the crisis,” said Mr. Broderick. “IBOA is on the record for many years warning that the banking culture which had emerged in the last decade or so was a matter of major concern – not only for staff but ultimately for the public good. Indeed we made a presentation to this effect to the Joint Oireachtas Committee on Finance and the Public Service over five years ago. It is also true that many financial institutions have still to address this issue: the culture is still largely unchanged despite the unprecedented convulsions that have rocked the industry and the transformation in the prevailing economic circumstances. “There has also been a serious failure of regulation – not only in terms of the operations of the specific agencies charged with this task but also in terms of both the resources and the terms of reference underpinning their operations,” he declared. “As the financial crisis is the result of a collective failure, we need a comprehensive investigation of the causes which can examine all of the contributory factors. Therefore, the multi-disciplinary approach proposed by Dr. Honohan has great merit. “An inquiry along these lines could serve a vital function in helping to establish public policy on the future direction of the financial services sector – which could not only address the position of Irish-owned banks but also consider the role of foreign-owned institutions operating in Ireland,” said the IBOA leader. “IBOA has repeatedly called for such a review. Indeed as long ago as 2004, in our submission to the Joint Oireachtas Committee on Finance and the Public Service, we proposed the creation of a Commission on Banking to try to achieve a consensus on the future development of the financial services sector. “In view of the Governor’s remarks, perhaps it is now a proposal whose time has finally come – so that we can bring together all of the stake-holders in the financial services sector to learn from the recent past so as to ensure that our industry works far more effectively in the public interest in the future."
