Bank inquiry 'to start next week'

The first inquiry into the causes of the Irish banking crisis will begin next week, an Oireachtas committee heard today.

The Oireachtas Joint Committee on Finance and the Public Service was addressed by Klaus Regling and Max Watson, the two banking and economics experts appointed by the Minister for Finance conduct a preliminary investigation into the matter.

The experts, both of whom have extensive international experience in bodies such as the International Monetary Fund (IMF) and the European Commission, will hold their first meetings with domestic sources next week.

They will make contact with the "relevant public and private sector bodies," Mr Regling told the group. This will include the Central Bank, the Financial Regulator, research institutions, trades union and consumer representatives.

Outside the Republic, the two men will hold a series of meetings with "key international bodies" including the European Commission, the European Central Bank, the Bank for International Settlements and the IMF.

"It's important to understand their point of view," said Mr Regling, confirming that his team's report would be completed by the end of May. Another report will be drawn up by the governor of the Central Bank, Patrick Honohan, over the same time frame. Both reports will then feed into a statutory Commission of Inquiry in the second half of this year.

The experts took soundings from the members of the committee on the causes of the financial crisis.

Fine Gael's finance spokesman, Richard Bruton described "a very deep regulatory failure", while his Labour counterpart, Joan Burton, highlighted "many warnings" of problems in the financial sector that were not taken seriously.

Elsewhere, Minister for Finance Brian Lenihan and Minister for Communications Eamon Ryan announced the creation of a group of experts to advise the Government on debt issues.

However, Fine Gael dismissed this move as a "talking shop" and "pathetic response".

In a statement, Olwyn Enright, the party's spokeswoman on social and family affairs, said: “The thousands of homeowners struggling to stay afloat will greet the Government’s latest ‘expert group’ on mortgages with dismay, as it means yet another delay before the Government does anything concrete to help them."