MINISTER FOR Finance Brian Lenihan has said he would be willing to extend the remit of the investigation into the banking crisis up to the nationalisation of Anglo Irish Bank in January 2009.
However, he told the Oireachtas Joint Committee on Finance and the Public Service that the proposed six-month commission of inquiry should not investigate the political handling of the crisis. The committee will have a budget of €1.8 million this year.
Mr Lenihan said he would consider extending the period covered by the commission beyond the originally proposed end-date of September 30th, 2008, when the bank guarantee was introduced. He had no difficulty with the January 15th date proposed by Labour finance spokeswoman Joan Burton.
“The cut-off date should be later than September 30th,” he said.
Michael Noonan, Fine Gael’s new finance spokesman, said the inquiry should go beyond September 2008 as solvency issues were identified after this date.
Asked about the revised business plan for the National Asset Management Agency, he said the report in yesterday's Irish Timesthat it could make a loss of several hundred million euros over its lifespan was a worst-case scenario.
“The figure of a loss of several hundred million as potential outcome was very much at the extreme end of the scenarios painted at this stage.”
Mr Lenihan said he did not believe the role of the Department of Finance in the run-up to the crisis and an analysis of Government policy was best examined by the commission of investigation.
Examining Government policy over a 10-year period would take longer than six months, he said.
Ms Burton said the role of the Minister and Department of Finance should be investigated.
Mr Lenihan said the reports into the crisis said this was not necessary. The main causes of the crisis identified by banking experts Klaus Regling and Max Watson in their report were the banks. “In their view the major culprit was the banks themselves, not the Government.”
An individual with international financial and European banking – and not necessarily an Irish judge – would be appointed “in the coming days” to lead the inquiry.
The Minister said the commission should investigate failures in governance and risk management at the banks, in particular “egregious failures” at Anglo Irish Bank and Irish Nationwide. The inquiry should examine whether external auditors commented on risk-management policy and procedures.
Mr Lenihan said he would consider including a proposal from the Labour Party to examine whether external audits complied with appropriate legal, regulatory and professional standards in assessing bank business plans.
