Download sinn fein response to governments banking inquiry proposals

SINN FEIN RESPONSE TO GOVERNMENT BANK INQUIRY PROPOSALS
Sinn Féin believes that such is the scale of the banking crisis that nothing short of full
public scrutiny is acceptable. The Government’s
proposed approach should be rejected in favour of an inquiry conducted
by a Joint Oireachtas Committee. Sinn Féin supports the Bill to amend the legislation
required to make this kind of Oireachtas inquiry possible.
The inquiry needs to examine and expose in full how the banking sector played a central
role in bringing the Irish economy to its knees. It must call to account Government
Ministers, top bankers and the so-called regulators who, instead of doing their duty,
maintained a cosy relationship with the banks and allowed bad management and fraud to
cause this crisis.
The Irish public have paid billions already (€7 billion) recapitalisation payments to
Anglo, AIB and BoI. Over €50 billion will be spent on NAMA. Billions more is required
for future recapitalisation. The amount put into our banks (and we are ignoring the
contemptuous ‘Special Purpose Vehicle’ to keep NAMA off the General Government
Balance Sheet), will altogether put our national debt up to somewhere in the region of
103% of GDP – the highest in Europe. We just had one of the most savage budgets in
history where we were told we had to take severe cutbacks because of a €24 billion
deficit. This future debt will entail real hardship for people, place a huge burden on
taxpayers, destroy what is left of our public services and potentially collapse the whole
economy. For this reason alone the public deserve a full inquiry.
Sinn Féin believes that the inquiry should focus predominantly on the
failure of regulation. There were early warnings of what the banks were engaging in. One
indicator used by most regulatory bodies to identify banks increasing their risk to
unstable levels is hyper-growth on
balance sheets. An annual growth rate of 20% and over can be a sign of excessive risk.
Yet over nine years, Anglo Irish Bank surpassed this rate eight times, and each of the
other main banks surpassed it on
occasion. How was the Irish Natiowide building society able to speculate so badly in it
loan book that almost 80% of it is going to end up with NAMA?
The role of government played must be examined. Little was done to improve regulation
of the banking sector and to ensure that there was no repeat of past banking scandals. The
government did not implement the 2005 report, to which Sinn Fein contributed, of the
Oireachtas Joint Committee on Finance and the Public Service, on the banking sector.
The recommendations of that report included legislation to protect whistleblowers; to
increase the maximum fines for transgressions from €5 million to €50 million; the
continuation of the bank levy; and for the Financial Regulator to ensure that low income
groups have equal access to borrowing from all credit institutions in order to ensure that
such income groups are not forced to rely on high costs sources of credit (moneylenders).
The report looked at bank charges and interest rates. It found that consumers were paying
too much for credit and money payment services. It exposed the lack of transparency on
the part of banks regarding their charges for customers. It also highlighted the continuing
need for regulation of bank charges.
These would have gone some way to making some bank practices more transparent.
We fundamentally disagree with the Commission of Investigation as a method to
undertake this inquiry. This work could be undertaken by members of the Oireachtas at a
great deal less cost to the taxpayer and with full public disclosure. As it stands the public
element of this process of investigation will be virtually non-existent.
The last Commission set up by this government was the Commission of Taxation – that
was sent off with a narrow terms of reference, at great expense to the taxpayer and its
findings were then ignored by the
government. As it stands, who will sit on this inquiry Commission? How
much will it cost the taxpayer? This work could be undertaken by members of the
Oireachtas at a great deal less cost to the taxpayer and with full public disclosure.
The systemic failures that pre-empted this banking crisis and the fact that many of those
involved are still in their positions requires a
fully transparent examination of the facts. This will not be achieved through this process
as set out by the government. This is an attempt to whitewash the truth before the inquiry
has even taken place.
By Arthur Morgan Sinn Fein Finance spokesperson.