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End of the road

Didn’t pay attention to the banking inquiry? This is everything you need to know

The committee of inquiry has presented its findings and recommendations regarding Ireland’s banking crisis after 14 months.

lynch Ciarán Lynch with the final report of the banking inquiry, published today

Updated 16.50

AFTER 14 LONG months the committee of inquiry into Ireland’s banking crisis has presented its final report.

At a press conference in the AV Room of Leinster House, the chairman of the inquiry Ciarán Lynch set out the agreed-upon recommendations, while for the first time the members of the inquiry found themselves on the end of questions rather than posing them.

In truth the various members of the inquiry looked both relieved and exhausted at having come to the end of their 14-month marathon.

Unfortunately, for those who would like a specific thing to scapegoat the economic crash of the end of the last decade on, there was to be no such public hanging.


As Lynch himself said, the inquiry report “needs to be taken on its own merits” and “no one thing led to the banking crisis”.

Some of the more noteworthy statements to emerge from today’s publication:

  • The ECB put undue pressure on Ireland to accept a bailout in 2010
  • That from this point of view the idea of burning senior bondholders was shot down by the ECB in 2010 with the specific threat of removing Emergency Liquidity Assistance (ELA) for Irish banks should the government not comply
  • Anglo Irish Bank was indeed solvent on the night of 29 September 2008 and would have been able to open its doors the next morning without the infamous guarantee being in place
  • That the idea of a soft landing for the Irish economy was never substantively tested in advance of the crisis and was not fit for purpose.
  • That the Central Bank was aware as early as 2003 that new lending practices were being adapted by Irish banks
  • Fiscal policy on the behalf of Irish governments post-2001 did not focus on mitigating future property bubbles
  • The governments of the time did not always follow the advice of either the Central Bank or the Department of Finance


A number of findings and recommendations have been made by the remaining members (Sinn Féin’s Pearse Doherty and the Anti Austerity Alliance’s Joe Higgins having declined to sign off on the final draft) of the committee in their finalised report.

The final published report consists of three volumes, while the first two volumes can be viewed here and here. At 604 pages between them, there’s plenty of material for the layman to sift through.

The third and final volume comprises evidential information from the inquiry and can be accessed here.

9538 Banking Inquiry The nine remaining members of the banking inquiry committee, pictured outside Leinster House today Sam Boal / Sam Boal / /

Some of the 28 recommendations made in the finalised report are:

  • All members of bank boards should have the requisite financial skillsets to be there
  • The mismatch between assets and liabilities (that is, funding long-term loans with short-term deposits, one of the key problems behind the banks) to be investigated and reviewed frequently at banking board level
  • Clear procedures should be in place with regard to a formal process of approach for a financial crisis, and that these procedures should be backed by legislation
  • Interestingly, one of the recommendations seems to be that future inquiries should be less stymied by legal process than the banking inquiry itself was – the Financial Services (Banking Reform) act of 2013 should be amended to that end

Taking questions

The various members of the inquiry have been through the mill in the last 14 months and it showed in today’s press conference.

For the most part, the remaining members put on something of a united front under questioning, with party rivalries set to one side.

Chairman and Labour TD Lynch said that much of the inquiry’s role had been to do with “debunking myths”, specifically around what happened with the blanket bank guarantee of September 2008, something he said “some journalists use as something like an aphrodisiac”.

“By October 2010 a bailout of the banking system was inevitable,” he said.

No single event led to this crisis, it was the cumulative effect of a series of decisions over an extended period of time.

“The Central Bank underestimated the threat of the property bubble – no-one acted decisively,” he said.

ciaran Oireachtas TV Oireachtas TV

This was the greatest systemic failure of our financial system in the history of the state. People believe that each crisis has its own origin and can never happen again. That is not the case. Lessons must be learned and applied.

Lynch added that the inquiry had proven that the crisis was really two crises: “a banking crisis and a fiscal crisis”.

The majority of members indicated that they were “very proud” of the work that the committee had done over the past 14 months.

“Look at the full story of the report, its totality,” said Fine Gael’s Eoghan Murphy.

“We needed to have a report, this is what we have signed off on,” said Labour Senator Susan O’Keeffe.

We were never going to be able to make findings of fact against individuals.

“We’ve added to the body of knowledge of what happened with our banking crisis,” said Fianna Fáil’s finance spokesperson Michael McGrath.

“By and large though, the Irish public already had their minds made up as to who and what was responsible,” he added.

mmc Oireachtas TV Oireachtas TV

Fine Gael TD Kieran O’Donnell broke ranks slightly by stating that one of the key findings of the inquiry was that the banks were dealing with a commercial property crisis, and not a residential problem.

“€32 billion worth of property went into NAMA from the banks – 80% of that was commercial. If that hadn’t happened the burden on the taxpayer in recent years would have been considerably less,” he said.

Chairman’s role

There was a moment of levity during the meeting when Michael McGrath was the first quizzed as to how Lynch had performed as committee chairman – a lack of faith in Lynch by his fellow committee members being a rumour that had persistently dogged the inquiry in recent times.

When asked about his role, Lynch replied: “I’ll let Michael take this one I think.”

McGrath will shortly engage Lynch in a do-or die battle in Cork South Central – one of the ‘groups of death’ in the forthcoming election with at least one high-profile TD expected to lose their seat.

“I’ll repeat what I’ve already said in public,” said McGrath.

That is that the chairman did an excellent job, and this wasn’t an easy job to say the least.
He dealt with what he was given with patience and skill and he has all of our praise for that. We were clearly constrained by legislation, something of which we’ve made a clear recommendation for going forward in Volume Two.

This statement is in reference to the inquiry repeatedly being stymied in its interrogation of certain witnesses by legal obligations – ex-chief executive of Irish Nationwide Building Society Michael Fingleton and the quashed statement of David Drumm being two examples.

McGrath lamented that the inquiry could not “tell the whole story”.

We were only able to scratch the surface of Anglo – an institution that was responsible for losing €30 to €35 million of taxpayers’ money that will never be recouped.
It was deeply frustrating not to be able to delve deeper.

File photo David Drumm refused bail by US court, will spend almost another three months in prison. David Drumm

David Drumm

Regarding the fact that the inquiry was unable to use the written statement it received from David Drumm, Susan O’Keeffe insisted that she initially was very much in favour of publishing the statement.

The Director of Public Prosecutions (DPP) had prevented the inquiry from doing so on the grounds that it could prove prejudicial to ongoing legal actions being taken against Mr Drumm.

“I would have published that statement, I was very in favour of doing so,” she said.

I really struggled with it, but I think we made the right decision in the end. There’s no point in being up against the DPP and being prejudicial against other things.

Chairman Lynch said that this report is “not the end of the story”.

We’ve gone beyond the timelines of previous reports, we’ve been debunking myths about the bank guarantee and about the bailout of 2010.

“This is a very worthwhile report,” said O’Donnell. “The public were able to see the witnesses for themselves which was important.

“Unfortunately, we faced a series of legal challenges from the beginning,” said Lynch.

You can read and download the report of the banking inquiry here.

Originally published 16.00

Read: ‘We’ve spent hours in the basement of Leinster House trying to find out what happened’

Read: It’s now very likely the election will finally be called early next week

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