Spot the difference between Ireland and Iceland

Will the terms of reference for the Irish Banking Inquiry be as wide as that of Iceland?

The Irish public does not have any such opportunity to engage in an inquiry which from the outset is perceived to lack legitimacy because of the decision to hold the investigation in private, unlike similar inquiries in the US and Britain. To that end, I have registered the domain name www.bankinginquiry.ie and perhaps the governor of the Central Bank, Patrick Honohan, would use it to ask the public what questions they believe should be asked, as was the case with the the Treasury Select Committee in Britain which held an inquiry to “identify lessons that can be learned form the banking crisis” and received more than 6,000 written questions from the public.

Selected quotes from the Irish Icelandic Banking Inquiry (Translated in English)

1. “ministers and representatives of government bodies passed the blame for failure to perform duties and no one assumed responsibility.” p.107

2. “When the banking system had become far too big, relative to the size of Icelandic economy, the governmental authorities needed to respond”

3. “The largest owners of all the big banks had abnormally easy access to credit at banks they owned, apparently in their capacity as owners”

4. “boundaries between interests of banks and interests of their largest shareholders were often fuzzy”

5. “The banks had invested their funds in their own shares.”

6. “the state’s budget policy nor its monetary policy adequately addressed economic fluctuations, overexpansion & growing imbalance in economy”

7. “authorities decided to lower taxes during an economic expansion period. This was done despite expert advice and even against better judgement of policy makers who made decision. This decision was highly reproachable “These (gov) decisions in fiscal and monetary management and others named in the report exacerbated the imbalance in the economy”

8. “The Icelandic banks thus lent substantial amounts while experiencing considerable liquidity problems at the same time.”

9. “the government’s actions concerning matters relating to the banks were unfocused when the situation became more dire”

10. “ministers focused too much on image crisis facing the financial institutions rather than obvious problem”

11. “the government did not act in harmony and overall leadership was lacking.”

12. “Shortly after collapse of banks in November 2008, an appraisal showed 40% of the booked value at the time when the banks collapsed.”

13. “[financial regulator] did not perform their duties adequately when auditing the financial statements of the financial corporations”

14. “both the parliament and the government lacked both the power and the courage to set reasonable limits to the financial system.”

15. “detailed criticisms and rebukes regarding government’s efforts during time leading up to collapse of the banks, may be found in the conclusions”

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