THE SCOPE of the banking commission has been widened to cover the events leading up to the nationalisation of Anglo Irish Bank on January 15th last year.
Minister for Finance Brian Lenihan announced yesterday that the commission would look into banking behaviour from January 1st, 2003, when the Financial Regulator was established, up to January 15th, 2009.
The commission’s remit had been expected to end on September 30th, 2008, the day the bank guaranteewas announced.
While the Minister has extended the timeframe he has not changed his position on excluding from the commission’s review the political decision-making that led to the guarantee and the nationalisation of Anglo Irish Bank.
The commission will be charged with examining matters relating to corporate governance and risk management in each of the banks covered by the Government’s guarantee up to the date of the Government’s decision to nationalise Anglo Irish Bank.
Mr Lenihan said the Government had also approved the laying of the draft Government order to establish the commission before the Houses of the Oireachtas. He said he expected to be able to announce the appointment of an individual to head the commission of investigation shortly.
In a statement yesterday Mr Lenihan said that the Cabinet at its meeting on Tuesday had approved the amended terms of reference for the commission as well as the terms for the review of macroeconomic policy to be carried out by the Joint Oireachtas Committee on Finance and the Public Service.
The committee will examine the policy lessons on macroeconomic management arising from the preliminary reports into the banking crisis.
Fine Gael finance spokesman Michael Noonan said last night the banking investigation should be allowed to inquire into the management of the banking crisis by Brian Lenihan and his officials.
He expressed regret that the terms of reference applied only to the banks and did not include the management of the banking crisis by the officials and the Minister for Finance. “I regret this very much and I am calling on Minister Lenihan to include the management of the crisis in these terms of reference,” said Mr Noonan.
He said it was now clear that Mr Lenihan, on at least two occasions, had made very serious policy decisions on false information provided by the banks.
“He didn’t know the extent of Anglo Irish Bank’s indebtedness when he covered all their liabilities with the bank guarantee. And I believe he was as surprised as the rest of us that at least €22 billion is required from taxpayers to bail out Anglo Irish.”
Mr Noonan said it was clear from the updated Nama business plan, published on Tuesday, that the banks did not provide accurate information to Nama on their indebtedness. “Whether this was due to the ‘naivety, mendacity or incompetence’ of the banks we do not know,” he said.
Mr Noonan said it was essential that the commission was allowed to examine and make recommendations on the advice given to the Minister from all sources, both officials and external advisers.
He said such scrutiny was in everybody’s interest and, in particular, it was in the Minister’s interest lest his good name be tarnished by others’ incompetence.
“Furthermore, in order to fully learn the lessons from the banking crisis and make sure it never happens again, we need to know the extent to which officials offered good or weak advice to the Minister about the public finances and taxation in the period from 2004 and 2007. I am therefore calling for officials to be allowed to give testimony to the Oireachtas Finance Committee on these matters,” said Mr Noonan.
