Bank inquiry should examine government policy, says Kenny

THE REMIT of the commission of investigation into the banking collapse should include government policy decisions, Fine Gael leader Enda Kenny told the Dáil.

He asked why the commission’s draft terms of reference related only to the failure of bank managers, directors, auditors and regulators.

Taoiseach Brian Cowen said the draft terms of reference were in line with the recommendations set out in the recent banking reports.

“The Regling and Watson report referred to those issues that can be amenable to fact-finding and those issues of policy and political nature which can be dealt with through the means of the committees that we have in the House,” he said. “We have indicated our preparedness to do that.”

Mr Cowen said the comprehensive nature of the recent reports had been welcomed by everybody and the Government was grateful for the work that had been done and the professionalism with which the authors had gone about their business.

“They set it out as they see it,” he said. “The draft proposals refer to the recommendations in the areas to which the reports refer.”

Mr Kenny said the preliminary reports made sharp criticisms of some government policies, such as the dramatic growth in spending between 2004 and 2007, which was a decision made by the current Taoiseach.

“The extension of tax reliefs at the height of the property bubble in 2006 was also his decision,” he added.

“He also exercised influence, as minister for finance, on the financial regulator in 2006 so that the proposed tightening of the quality of governance of bank directors was never actually implemented.”

Mr Cowen replied that all political heads of departments took full responsibility for their decisions.

“I have said that those decisions were based on advice that has subsequently been proven to be wrong, but that does not take away from the responsibility that I take for the decisions that I make,” he said. “I have always made that clear, so any suggestions by the deputy or anybody else that I do not take responsibility for decisions made is not correct.”

Mr Cowen added that he had terminated 11 of the property tax incentive schemes after a full review.