Report provides us with little more than wisdom of hindsight
A newspaper feature yesterday profiled the case of a Longford man weighed down by negative equity, who has to commute to Galway because he cannot afford to sell his house, and who also carries the burden of two overpriced apartments in Bulgaria.
If Peter Nyberg is right about anything in his report on the banking crash, he is right in saying that an awful lot of people were involved. Including, the report says, the media. It has been observed that there is nothing so fascinating -- and upsetting -- as the sight of one's neighbour getting rich. Naturally, there will be enormous media coverage of such events, some involving bubble blowing.
Newspapers did very well from property advertising during the boom. But some of the most blatant boosting was on television, where the attraction was not advertising, but audience. People were, and are, fascinated by property values. Some programmes of this kind are still on air, and their content is still often dubious.
We might be accused of special pleading when we suggest Nyberg could have made more of the dissenting media voices, of which this newspaper's David McWilliams was one of the most strident. Or he might have considered more fully the implications of the storm of abuse which descended on journalist Richard Curran and the makers of the "Future Shock" programme which produced a remarkably accurate forecast of the consequences of a property price collapse.
Why would the banks, the property industry and, often, government politicians behave this way if, as the report, suggests, they did not see the risks, or lacked the expertise to recognise them.
Other parts of the report lend support to the idea that people in authority knew a great deal about the dangers, but did not want to derail such an enormous gravy train. Why else would Anglo executives not disclose letters from the Regulator to the bank's board? Why did Irish Nationwide under Michael Fingleton abandon all pretence at credit control? Troubling questions go on. Why would people in banks fear for their jobs if they spoke out on the risks? Why was the independent Central Bank scared of being unpopular? Unpopularity should be a badge of honour among central bankers.
The lack of even speculative answers to these questions means the Nyberg Report seems somehow unsatisfactory. The greatest frustrations concern the last weekend of September 2008, when the blanket guarantee was issued. We can readily believe the banks told the Government that they had only temporary borrowing problems. Three weeks later, British bankers told Gordon Brown the same thing. He did not believe them, but claims that was more instinct than hard information.
Mr Cowen and Mr Lenihan may well have been in the same position. But then comes the revelation that there are no formal minutes of those discussions. At the end of this tortuous three-year process, Mr Nyberg was actually unable to say what transpired that weekend.
It stretches belief to breaking point that no record was kept of momentous decisions which had the power to decide a whole country's fate. It raises again the nagging suspicion that guilty secrets are being hidden. The new Government's proposals to strengthen the power of Oireachtas committees are welcome. Michael Noonan suggests that top bankers be hauled before the new committees for a more personalised grilling. He should make sure that the politicians and officials involved also appear. We are unlikely to learn anything new. The purpose would be to start to do things in a new way. Mr Nyberg appears to have been a bit shocked by the endemic secrecy of life at the top in Ireland and the fear of stepping out of line.
There is no great hurry to improve risk awareness at Irish banks. The urgent need is to reduce the formal and informal powers of government ministers and bring Irish officialdom blinking into the light, before the new coalition gets to like the present arrangements.
All of this will feed into the furore of the payoff to former AIB chief Colm Doherty, but this is not as simple as it may appear. €2m of the €3m was to pay for a pension which will provide a decent percentage of his final €500,000 salary. Such a pension is ferociously expensive, but not as expensive as those awarded to the last two taoisigh, who presided over the disaster, or to the senior civil servants who failed so miserably in their duties.
0 comments:
Post a Comment