Department's delayed issue of bank crisis files criticised

THE DÁIL’S spending watchdog yesterday criticised the Department of Finance for its nine-week delay in producing crucial documents relating to the banking crisis.

The chairman of the Public Accounts Committee Bernard Allen received the documents, requested in early May, on Thursday and began circulating them to members yesterday.

The documents from the department, the Central Bank and the Financial Regulator’s office relate to the period in the lead-up to the decision to guarantee Irish financial institutions on September 29th, 2008.

The files are said to be substantial but some sensitive information has been redacted. The PAC was due to discuss the information at a private meeting last Thursday but was unable to do so because the department was unable to make them available in time.

Following a telephone call from Mr Allen to senior officials in the department, the files were made available that afternoon. The PAC will now discuss the material at its meeting next week. Members have been asked to respect the confidential nature of the documents.

Yesterday Mr Allen was critical of the nine-week delay.

“The committee is disappointed that this information has taken so long to be handed over to us. We were under the impression that we would have the documents in time for this week’s meeting. Regrettably, this was not the case.”

A spokesman said the department had made every effort to provide the requested documents to the committee in a timely fashion.

“In compiling the documents provided the department had to work within considerable legal constraints concerning legal privilege, contractual and copyright issues, as well as Cabinet confidentiality.

“Even following redactions some of the documentation will have a level of commercial sensitivity. The Department of Finance has asked the Public Accounts Committee to treat the documents confidentially,” said the spokesman.

The documentation is thought to be the same as that which informed the eighth chapter of the report by the Central Bank governor Patrick Honohan into the response by Government and regulators to the growing banking crisis during the late summer and early autumn of 2008.

Prof Honohan’s report found that the consensus throughout the period, up to and including September 30th, was that the problem was essentially one of liquidity problems in the financial institutions, rather than solvency problems.

In his report Prof Honohan said that the minutes of the Financial Regulator’s board meeting “did not record any concerns as to possible underlying weaknesses of the various institutions which were believed to be suffering the consequences of a worldwide ‘financial tsunami’”.