The Oireachtas banking inquiry will ask former taoiseach Brian Cowen this week whether he has any observations on the evidence presented by Central Bank Governor Patrick Honohan.
Former attorney general Paul Gallagher will also be asked whether he has anything to say in relation to Mr Honohan’s evidence.
Prof Honohan told the inquiry on Thursday that the late Brian Lenihan, finance minister at the time of the State bank guarantee of 2008, wanted to nationalise both Anglo Irish Bank and Irish Nationwide Building Society instead of including them in the guarantee.
The Central Bank governor said Mr Lenihan was “overruled” by a more senior politician on that question, as he was when he “argued strongly” not to include subordinated or junior bank debt in the guarantee.
Prof Honohan said Anglo should have been allowed to fail in September 2008, and said that covering subordinated debt in the guarantee was a mistake.
In the wake of his evidence, it was recalled in political circles that Mr Cowen had told the Dáil the week after the guarantee that subordinated debt was included because that was the advice of the competent bodies.
Under questioning from then Labour leader Eamon Gilmore on October 8th, 2008, Mr Cowen said said the Central Bank and Financial Regulator indicated which areas would be covered by the guarantee and put forward its scope. Mr Cowen said “we went with that advice” but gave no indication of a contrary view in relation to subordinated debt from Mr Lenihan.
The inquiry plans to call Mr Cowen to a full hearing in due course, but this will not happen before summer and the panel wants to take evidence first from figures who held top management and board posts in the banks.
For legal reasons, however, the panel will write to the former taoiseach in coming days setting out the direct and implicit references made to him in the hearing with Mr Honohan.
Mr Cowen will be offered an opportunity to provide an immediate response or to wait until his own appearance before the panel.
It is not known whether the inquiry had planned to call Mr Gallagher to give evidence directly. However, the former attorney general, too, will be provided an opportunity to make observations on the references made by Mr Honohan.
Such contacts will be established as a matter of routine as the inquiry proceeds with its work. The panel believes it will be obliged to write to every individual mentioned in public session – either explicitly or implicitly – to provide them an opportunity to reply.
Shorter hearings
The inquiry is moving to refine how it carries out public hearings in the current “context” phase of its work. Instead of scheduling prolonged sessions over the course of a single day, with one external witness, it now plans shorter hearings and to hear from more than one witness per day.
On Wednesday the inquiry will hear from German consultant Klaus Regling, who co-authored a report on the Irish crash before he became chief of the euro zone bailout fund. It will also hear on Wednesday from Trinity College Dublin academic Philip Lane.
Future witnesses in the current phase of the inquiry include Bill Black, a law and economics professor at the University of Missouri-Kansas City.
