Cantillon: Banking inquiry has to be about more than apologies

After four months of an unnecessarily elongated context phase, the Oireachtas banking inquiry finally got down to business this week with the appearance of two executive from the National Asset Management Agency and two former senior executives of AIB.

The testimony from Nama chief executive Brendan McDonagh of his non-part in Government Buildings on the night of the bank guarantee was both new and fascinating.

Former AIB chairman Dermot Gleeson and Donal Forde, the one-time head of the bank's operation in Ireland, both offered their deep regret at how events unfolded.

In essence, they said AIB’s problems stemmed from following the herd, allowing an over-concentration in certain property loans, not getting sufficient security and not realising that the confluence of domestic and global events in 2008-09 could actually happen all at once.

There were essentially two lines of questioning this week – one around the night of the bank guarantee (September 29th, 2008), the other about the wider events that led to the collapse of the financial sector here.

That’s fine, but there is a danger that the inquiry might simply act as a public stage for various ex-bankers, regulators and politicians to offer their sincere apologies to taxpayers and little else, and that we’ll get nothing more than general overviews of how it came to pass that Irish banks became so overexposed to property and indulged in such reckless lending.

Forde’s unit approved €17 billion of land and development loans and was responsible for bringing down the bank, according to both Gleeson and Forde. He was a central figure in the issues that led to the bank’s €20.8 billion recapitalisation and nationalisation. And yet, so many questions were left unanswered following his 3½-hour testimony.

The first two days of this phase hint at the inquiry piecing together the events of the night of the guarantee but it’s not clear that we will get anything more than generalisations about the catastrophic failures within the banks that led to their collective €64 billion bailout.

This shouldn’t just be a platform for former bankers to say sorry. This has to amount to something more substantial.