As the terms of the commission of investigation into IBRC transactions are finalised, a small number of key issues are in play.
Following last night's talks with members of the Opposition, the indications are that Minister for Finance Michael Noonan will alter what has been published, but will not meet all the Opposition demands. The Government is likely to publish the terms of reference after today's Cabinet meeting, with a Dáil debate to follow. The key issues are: 1. The time period of the inquiry. As currently structured, the terms of reference cover the period from the nationalisation of the former Anglo Irish Bank on January 21st, 2009 to the liquidation of IBRC (which took on Anglo's assets and later those of Irish Nationwide) on February 7th, 2013. Catherine Murphy TD and Sinn Féin have both called for the inquiry to be extended to cover the period following the appointment of the special liquidators, KPMG, saying this is essential to give a full picture of what happened.
The special liquidator faced much tighter controls than the former IBRC board, operating on specific criteria set down by Mr Noonan in relation to the terms to be offered to borrowers as the bank wound down, including the price at which they could refinance their loans.
Relationships between borrowers and the bank would have continued to be dealt with by client teams . So, for example, while Catherine Murphy referred to a letter from Denis O’Brien to the special liquidators in relation to his borrowings, any such letter from a borrower would have been replied to by the client teams and not by the special liquidators themselves.
The inquiry terms may include some provision to allow access to information from during the special liquidation period, when it is relevant to specific issues being examined. A full extension to all the issues dealt with under the special liquidation would significantly increase the work of the inquiry.
2. The scope of the inquiry. Fianna Fáil has called for the terms of reference to include the wealth management division, a separate legal entity, and this is likely to happen, though it is not clear what the commission might look for here.
The Government will have to decide whether to specifically increase the limit for transactions being examined – currently set at the 40 or so transactions that cost the bank €10 million or more.
So far Noonan has said that the inquiry will have scope to look at smaller deals if it wants to, but that including all smaller deals would inevitably lengthen the process.
The terms on which loans were granted to borrowers will also be examined, following Murphy’s Dáil claim of a rate of 1.25 per cent being applied, or discussed, for Denis O’Brien. He has disputed her information, as has former IBRC chief executive Mike Aynsley. Aynsley has said some were on relatively low rates historically from their Anglo days and that this could not always be easily changed. In some cases low rates also probably applied where borrowings were backed by deposits.
Many of the decisions examined will come down to commercial judgements made at the time and it is not clear how definitive a commission could be in commenting on these, or what information it can reveal. The terms of reference may also be extended to allow some examination of oversight by the Department of Finance, at least in specific cases.
3. When it will report. The Opposition wants the inquiry to report before the next election. Indications were last night of some government reservations on getting an interim report on a specific issue.