Tuesday, June 8, 2010

Banking Crisis Reports: Overdue?

There were reports that the two "scoping" reports into the causes of the banking crisis here would be out last week but that did not materialize. Now RTE reports that "A special Cabinet meeting is being held to consider two reports into the banking crisis, which are understood to be critical of the regulatory authorities and of Government budgetary strategy."

More from RTE: "It is expected the reports will be severely critical of the role of the Central Bank and of the Financial Regulator in overseeing the financial system.

It is understood that there will also be criticism of the Government's budgetary strategy in the run-up to the crisis, as well as questions about the blanket guarantee of the banks liabilities put in place in September 2008, and whether subordinated debt should have been included."

The scoping reports will also say a lot about the experts writing them and about the integrity of the process itself. If these reports are, as was claimed, to be the foundation for a full inquiry into the causes of the crisis to establish responsibility, they must pose the right questions and shine light on areas for further investigation. They must also identify targets or at least institutional actors for further examination and frame the areas where evidence would facilitate the imposition of responsibility. Anything less will be regarded as a failure.