This letter was rejected by Irish Times but published by Irish Independent
From: Paddy Healy [mailto:firstname.lastname@example.org]
Sent: 28 June 2009 09:48
Subject: “More right than wrong”-Cowen
“More Right than Wrong”-Cowen
In response to the recent IMF Report, Taoiseach Brian Cowen says he did more right than wrong as Minister for Finance.
Writing in the most recent issue of Economic and Social Review, Professor Patrick Honohan of Trinity College Dublin said the “Irish banking system had been, in effect, on a life-support system since September 2008.—-
Complacency resulted in the banks fuelling the late stage of an obvious construction bubble with massive foreign borrowing, leaving them exposed to solvency and liquidity risks which in past times would have been inconceivable—-
At the end of 2003, net indebtedness of Irish banks to the rest of the world was just 10 per cent of GDP. By early 2008 that had jumped to over 60 per cent”
In plain terms, Irish financial institutions borrowed an additional 90 billion abroad over 5 years. This money was lent out without adequate separate security to fuel a property bubble. Now all the main financial institutions are “broke” and on a life support system from the Irish tax payer.
Brian Cowen as Minister for Finance presided over this debacle. He had the expertise of the Department of Finance available to him. He had the reports and advice of the Central Bank available to him. He had personally appointed a number of members of the board of the Central Bank.
Brian Cowen and his cabinet colleagues allowed the banks to create the biggest financial catastrophy in living memory. The whole of Irish society is now paying the price.
This is not a matter of backward looking recrimination.
If a person who allowed such a catastrophy to occur in his domain of responsibility remains in office, any vestige of accountability in Irish society will be dead. Accountability is essential to democracy and to a harmonious society. The restoration of accountability is a pre-requisite for addressing current economic problems in a fair and equitable manner.
After Governor of Central Bank calls for enquiry, Irish Times “discovers” issue, Dec 2009
Thu, Dec 24, 2009
INSIDE THE WORLD OF BUSINESS
Nationwide adds to pressure for inquiry into bank failure
THE CALL by the governor of the Central Bank for a public inquiry into the collapse of the banking system seems more apposite with each passing day.
The revelations this week about the way Irish Nationwide went about its business may not in themselves be entirely new or unexpected, but they paint a shocking picture of a licensed bank run as a personal fiefdom.
As a consequence of this culture, the bank is now being rescued by the Government and the customers who theoretically own it will be passed from Billy to Jack as the authorities seek to create a third banking force.
The other four Government-guaranteed banks have equally sorry tales to tell and are – as the incoming managing director of AIB has acknowledged – the architects of much of their own misfortune.
Patrick Honohan’s initial call for an inquiry – made to an Oireachtas committee – fell on deaf ears in Government circles and a similar response followed his repeated call over the weekend, although the Greens seem to be bowing to the inevitable.
Their tardiness is regrettable, but not surprising. The Government and Taoiseach Brian Cowen are unlikely to emerge from any such inquiry with much credit.
The Taoiseach is particularly exposed as he was minister for finance at the time that the first cracks started to show and it might still have been possible to rein in the both bank lending and the property market.
However, Cowen would not be alone. The banks and the Department of Finance could all expect to come in for a lot of criticism in any such inquiry.
As a result, they can hardly be blamed for following in the Taoiseach’s wake and his assertion that he and his officials are too busy saving the State to devote resources to an inquiry of the sort suggested by Honohan.
It is an inadequate response and something of an insult to the governor.
The implication from it is that Honohan is unaware of the extent of the crisis facing the State and is either naive or mischief-making by calling for such an inquiry at this time.
This seems unlikely. As governor of the Central Bank and a member of the governing council of the European Central Bank, Honohan can hardly be under any illusion as to the extent of the problems confronting Ireland.
If anything, his ringside seat can only give his suggestion more credibility.
Better than most, he has seen how the events of the past 18 months have exposed massive flaws in the way this State goes about its business.
The cost to its citizens of fixing the mess is so large as to be incomprehensible to most and it threatens to beggar a generation.
A sincere attempt to establish the reasons for this and to try and fix them is not some sort of academic frolic or exercise in apportioning blame; it is simply common sense.
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