The governor of the Central Bank will deliver the report of his preliminary investigation into Ireland’s banking collapse to the Government today.
Prof Patrick Honohan was asked to examine the performance of the Central Bank and Financial Regulator in the five years preceding the Government guarantee of the financial institutions in September 2008.
A second other preliminary report, by German banking expert Klaus Regling and his British colleague Max Watson, was delivered to the Department of Finance over the weekend.
It is a more general inquiry, looking at the performance of the banks and banking system in the same period.
The Government is expected to published both reports later this week.
The two reports will form the basis for the Government and the Oireachtas’s draft terms for a Statutory Commission of Investigation. It in turn will inquire into the causes and factors that led to the failures of the country’s largest financial institutions. The Government has given an undertaking that its terms will be published by the end of June.
The commission, which will conduct most of its investigation in camera, will be expected to complete its work by the end of the year.
Its terms of reference, drawn up by Government, has drawn sharp criticism from the Opposition for specifically excluding the role of Government, or the events of late September 2008 leading to the unprecedented decision to guarantee Irish banks. The Opposition has claimed that the commission’s inquiry will disclose little that has not already been made public.
Prof Honohan’s inquiry has interviewed senior officials in the regulator’s office and in the Central Bank, including, it is believed, former regulator Patrick Neary and John Hurley, Prof Honohan’s predecessor as governor of the Central Bank.
Prof Honohan told an Oireachtas committee earlier this year that it might be considered surprising that it fell to him to inquire into his own organisation. He said it was “not the easiest of balancing acts to ensure that I find out what needs to be known, without damaging the functioning of the organisation”. He told the Joint Committee on Finance and the Public Service that he approached his task with a presumption that the banking crisis reflects a failure of the regulatory system.
The reports will coincide with the May exchequer returns, which are due on Wednesday. Preliminary figures suggest the returns could be close to target for the second month in a row but that will not be confirmed until this evening.