PRESSURE IS mounting from several quarters for a a rethink of the terms of reference of the Commission of Investigation into the banking collapse. The governor of the Central Bank, who is also the author of one of the two preliminary reports on which the terms of the commission are based, has called for it to be put on hold until the autumn to allow further thought.
Dr Patrick Honohan has argued that more time needs to be devoted to consideration of exactly what the commission should focus on. He has identified a number of areas of particular interest to him wearing his hat as governor of the Central Bank.
The former chief executive of the National Treasury Management Agency, Michael Somers, has also criticised the proposed commission. He has highlighted the decision not to look into what happened at the all important nexus between the Department of Finance and its political masters. The question that remains unanswered is whether the Department in its role as primary adviser to Government shouted stop.
Dr Honohan is more sanguine on this particular issue and indeed it is possible to argue the merits or otherwise of all the issues that the two men want included or excluded in the investigation. The key point is that if individuals of their calibre are calling for a rethink, then it would be foolish not to give it serious consideration.
The Government has yet to respond to either suggestion and its publication of the terms of reference of the proposed commission at the same time as the publication of the two preliminary reports looks hasty to say the least. It may turn out to be something much worse. The strongest criticism levelled against the current terms by Dr Honohan is that it may give rise to a sprawling, unfocused and no doubt expensive juggernaut.
It is worth bearing in mind that the Government never wanted the inquiry to begin with. It only conceded to one after considerable public pressure. Having done so, damage limitation would appear to have been the order of the day. The decision to exclude events post September 2008 from the initial investigations has been compounded by the subsequent decision not to include the advice to Government from the Department of Finance in the draft terms of reference.
The issue, which is now being highlighted by Honohan, is whether in its efforts to limit the scope for political fall-out from the commission, the Government has hamstrung it entirely. It is probably going too far – but not out of keeping with the current public disenchantment with politicians – to suggest they deliberately left the terms of reference so vague as to ensure the resulting commission would run into the sand.
What is clear is that if the Government is serious about gaining a better understanding of what went wrong in order to underpin more effective policymaking in the future then it would be advised to have a second look at the terms of reference and ensure the commission is more clearly focused before it gets under way in earnest.