ECB has duty to be at inquiry, says TD

European Central Bank

(ECB) president

Mario Draghi

has a duty to ensure the institution appears at the Oireachtas banking inquiry, according to a senior Government TD.

Liam Twomey, chairman of the Oireachtas finance committee, is writing to Mr Draghi to stress the importance of ECB input into the banking inquiry.

Mr Draghi said last week that the ECB would not formally participate in the banking inquiry, but he did not rule out informal participation. Mr Twomey told The Irish Times he had decided to write to Mr Draghi not just because the Irish people deserve to hear the truth but because the failure of the ECB to appear would do serious damage to the standing of European institutions in this country.

"It would be extremely bad manners for the ECB to refuse to attend the inquiry, but the other side of the coin is that it would be a fantastic opportunity for the bank to put its side of the story about how it handled the crisis to the people of Ireland, " said the Wexford TD.

Appearance vital

He said that, for people like him who had campaigned for a Yes vote in several European referendums, it was vital that the ECB appeared at the inquiry.

“It may be true to say that legally the ECB is not accountable to national parliaments, but it makes no sense for the bank to refuse to explain why it acted as it did during the financial crisis,” Mr Twomey said.

He added that citizens across the EU increasingly believed that institutions such as the ECB were not accountable, so it was vitally important that it acted to counter that perception.

“Failure by the ECB to attend the banking inquiry would be a huge missed opportunity and it would undermine people like myself who believe in the EU,” he said.

Appearing in the European Parliament last week, Mr Draghi pointed out that the ECB was not accountable to national parliaments. “The ECB as a European institution is accountable to you, the European Parliament, so as such we will not participate formally in the national parliament’s inquiry,” he said in response to questions from Fine Gael MEP Brian Hayes. He added, however, that the bank may participate informally in the Oireachtas inquiry.

“We haven’t discussed yet what sort of shape this informal participation could take,” said Mr Draghi. He added that for years before the EU/IMF bailout, the level of liquidity provided by the ECB to Ireland had been extraordinary. “There are limits to the support the euro system can provide to banks within the member states.”

He insisted that the actions of the ECB during the crisis in Ireland were not “some sort of irrational, authoritarian act.”

"It was part of an overall policy dialogue between the ECB and the Irish authorities," he said, noting that former minister for finance Brian Lenihan had told Mr Draghi's predecessor, Jean-Claude Trichet, in a letter that Ireland fully understood the concerns of the ECB.