The team of public servants working on solving the banking crisis deserve respect rather than derision, writes NOEL WHELAN
‘HORRENDOUS” WAS the adjective for which I reached here last weekend to describe the likely public reaction to the banking announcements scheduled for Tuesday. Nobody envisaged then that the black hole in Anglo Irish Bank would gape as wide as was revealed. The full lexicon of adjectives has since been exhausted as politicians, commentators and the public grapple with the scale of the banking collapse and the costs we face to repair it.
This week’s revelations have not led to “riots in the streets” as Enda Kenny once predicted. Neither has it occasioned street protests on the scale witnessed in Greece or Iceland as some predicted. The most recent banking revelations have, however, appalled the public and thrown more dynamite under the Government’s shrunken and fragile support base.
The public is understandably nervous about the scale of the challenge presented by this crisis although some comfort can be drawn from the fact that those working on the problem include some of the most able and independently minded people in their respective fields.
While the public has every reason to doubt Fianna Fáil’s economic competence, the country is fortunate that Brian Lenihan is currently in the relevant political position. Lenihan has taken to the task in a way which suggests he has mastered the detail, insisted on getting the full picture, held his nerve, weighed the options, disregarded political considerations, made decisions in the national interest and set about competently explaining them.
I don’t claim to be objective on this point as I have long regarded him as the best politician of his generation but from last autumn there has been growing support across the political and media spectrum for him and the stance he has taken on both the budget and the banks.
One way in which Lenihan has impressed is his willingness to deploy other talented people to work on problems.
Alan Ahearne, then an economics professor at University College Galway, was one of the most critical and articulate voices before and shortly after the recession and banking crisis hit. Now, as Lenihan’s economic adviser, he sits on the decision-making corridor.
In the last few months Lenihan has also appointed strong public servants to head the Department of Finance, the National Treasury Management Agency and Nama.
After public advertisements, international head-hunting and consultation with Opposition leaders, he put in place a board at Nama which is both expert and independent. The size of the haircut Nama imposed on the banks should rebut the cynical assertions that Nama, operating under political influence, would go easy on the banks.
International talent searches produced an Australian heavy hitter, Michael Aynsley, as the new chief executive of Anglo Irish Bank and Mathew Elderfield, formerly the financial regulator of Bermuda, as our new financial regulator. The latter seems determined to enforce a quantum leap in regulatory culture on Irish financial services.
The man who has taken on the most thankless task is former Fine Gael leader Alan Dukes, chairman-designate of Anglo Irish Bank. Those who do not appreciate Dukes’s commitment to public service will scratch their heads wondering why at this stage in his life he has taken on this poisoned chalice.
One of the nastiest comments in a week of angry utterances was Leo Varadkar’s insinuation on Morning Ireland that the opinion of Dukes and others should be disregarded because they were in it for the money. When the support of Alan Dukes and Patrick Honohan for aspects of the recovery plan was put to Varadkar, he announced that if he was minister he wouldn’t be listening to what he called “former politicians” or “people who are on the government payroll”. At the rate at which Varadkar is currently shooting his mouth off about Fine Gael’s leading lights we can rest assured he is unlikely to be put in charge of the problem anytime soon. His dismissal of Dukes was particularly curious since the Fine Gael front bench itself turned to Dukes to head a task-force looking at their health reform proposals.
Perhaps the most crucial recent appointment was that of Honohan as governor of the Central Bank. Bringing considerable expertise and no political baggage to this crisis, he came to the same conclusions on solutions as the Fianna Fáil Minister. Honohan could easily have continued to sit comfortably in his Trinity College job, blogging or writing opinion pieces about the crisis. Instead he is prepared to work at the crisis day in, day out, and take politicians and the public patiently through the solutions.
Those looking for clarity in a week where political discourse generated more heat than light should visit the RTÉ Primetime website and watch Honohan’s full interview with Miriam O’Callaghan on Tuesday. He painstakingly sets out why he approves, in general, of Government policy on the banking crisis including the decision to introduce the bank guarantee and retain some elements of Anglo as a functioning bank. He goes so far as to say that even if we knew in September 2008 what we know now about the extent of Anglo’s problems the guarantee would still have been the right decision.
None of this is to say that those managing this crisis are infallible, or even that they all agree with every aspect of the decided policy. Neither am I suggesting that alternative views are not legitimate. With the stakes so high it is important that all aspects are rigorously debated. More time, for example, should be taken to thrash out the relative merits of alternative solutions to the Anglo mess.
This group of public servants, former academics and politicians are to be complimented rather than derided for being prepared to apply their skill and experience to a monumental challenge.
They have togged out in the public interest and are making a more substantial contribution than those who merely want to scream in frustration or condemn from the sidelines.