Banking Inquiry

Live coverage of the first day of the Banking Inquiry

Steven Carroll Wed, Dec 17
 
LIVE: Banking Inquiry

Sort by:

  • Latest first
  • Oldest first
  • This event has now ended
  • 09:27
    Good morning and welcome to our coverage of the first public session of the banking inquiry.
  • 09:30
    Finnish academic and finance expert Peter Nyberg, who compiled a key 2011 report on the State's financial collapse, will be the first witness before the committee, which is chaired by Labour's Ciaran Lynch
  • 09:33
    It's underway now and Mr Lynch is setting out the goals of the committee. It hopes to put the pieces of the jigsaw together to tell the story of the banking crisis, he says.
  • 09:34
    The inquiry was dealt a blow last night with the European Central Bank declining an invite to participate.  http://www.irishtimes.com/news/politics/ecb-declines-to-appear-before-first-phase-of-banking-inquiry-1.2040062
  • 09:35

    Ciaran Lynch says it is a privilege to serve on the committee

    "This committee has the power to compel written and oral evidence, so there will be witness testimony, oral evidence, transcripts, detailed records – all presented in public. It means that the Irish people will hear, at first hand, from those who were involved in one of the major events in the history of our country. The public will be able to see and hear from them as they are questioned and give their evidence to our committee."
  • 09:36
    He's now introducing Mr Nyberg as academic, former assistant to Finnish finance department and one of the first people to take a look at the collapse of the Irish banking system
  • 09:37
    Nyberg says he is "pleased and honoured to be invited"
  • 09:37

    "I have no other documentation available to me than the published report," he says

  • 09:38
  • 09:39
    He says all supporting documentation for his 2011 report on the banking crisis had to be destroyed by law.
  • 09:41

    Nyberg understands not all commentators are satisfied with his report...but it is what it is. The commission was not required to name names. This made it easier to get people to tell their stories, avoid redaction and legal challenges.  



  • 09:42
    "The responsibility for mistakes is already obvious in my mind," Nyberg says. Heads of public and private institutions are responsible for how they fulfill their mandate. Borrowers and lenders responsible for the risks they take on.  
  • 09:44
    For background: Here's a piece by Mary Minihan on the facts and figures relating to the banking inquiry.
  • 09:45
    Nyberg says the  Irish crisis was not unique, similar to issues that arose in other crises in other countries
  • 09:47

    Anglo and Irish Nationwide quite often discussed separately in his report and this was because it was a request in the terms of reference, he says

  • 09:48
    It would be wrong to assign blame primarily to lenders, he says. Bank loans often involve borrowers making a bad decision.  
  • 09:49
    Domestic real estate bubble and factors that allowed that should be examined, he says. "Real estate mania" not a uniqie phenomenon in Ireland, it happened also in Spain, US and Scandinavia.  
  • 09:49
    It is unlikely the hoped for soft landing would have been the ultimate outcome, he says. Few signs banks or instituitons changing the way they are acting. The assumption is that their work and behaviour would have continued until the crisis came for some other reason.  
  • 09:50
    He says there were "few contrarians" in the public sector or the banks. Some were insistent but were ignored or sanctioned in some cases. Why not listen to them? he asks.  
  • 09:53
    While the bubble was being blown a lot of people had benefits from it continuing, he said. Government got tax benefits from real estate market and this was dealt out to the public.  
  • 09:54
    People had "concrete joy" from the bubble while it lasted but these advantages disappeared once it burst, as has been since in Ireland since 2008
  • 09:54
    Both the advantages and the pain of the crisis are widely shared, he says.
  • 09:55
    Not fully balanced to look for a few decisions that were critical for the bubble to start or continue. Hundreds and hundreds of individual decisions and contributors who felt they never did anything wrong
  • 09:56
  • 09:57
    On external auditors, Nyberg says there is not much to say. Did not warn clients about problems to come but did discharge the checking of historical accounts that they see as their main business. Is that enough, he asks. "That's for you to decide Mr Chairman."
  • 09:58
    There were efforts in the last minute, particularly in the Department of Finance, to get legislation under way which would have made it possible to resolve banks in an orderly manner before they close but that was not possible any more becasue of the timing, he says.  
  • 09:59
    When decision makers are faced with a situation like this they make the safe choice, even if it is not wise in the long run, he says. That's what the government did.  
  • 10:00
  • 10:01
  • 10:01
    That's the end of his opening address.  
  • 10:03
    He tells Ciaran Lynch the government was being told that the banks were ok. PWC check on banks in September found they were "solvent". Economy turned out much worse than anybody expected, bubble more real and larger than anybody expected and the collapse was faster and deeper than anybody foresaw  
  • 10:06
    Nyberg: According to the public institutions they were solvent but the market doubted it. They always look forward and it's irrelevant if it is solvent today and not tomorrow.
  • 10:06
    Pearse Doherty of Sinn Fein has 20 minutes with Nyberg now. The first member to ask questions.   Opening salvo includes some Irish, which I'm sure Nyberg understood...
  • 10:07

    When were legal liabilities of banks incurred by State, Doherty asks.  


    That is something the commission did not look into, Nyberg says.  

  • 10:08
    When legal situation changed government would have had to decide whether to guarantee the banks - how much and how long- to ensure the banks stayed open and people could get their money, Nyberg says.  
  • 10:10
    Nyberg: First reaction of market after guarantee was positive, he says. Situation went wrong some time later. Question of what risk are you willing to take. Further reflection would have be useful....
  • 10:12
    Nyberg: In one way or the other the government had to assure the markets that the irish banks were solid enough for them to receive money as before. If there had been no guarantee how would that have been done? The end result is what matters...The legal basis for more sophisticated solutions or resolutions was not there.
  • 10:13
    Nyberg: There were quite an number of discussions on alternatives. A shorter guarantee. One with less scope. Those were not considered realistic and (the blanket guarantee) was what came out.
  • 10:14
  • 10:14
    Doherty says some have a view that "we all partied" during the boom. Asks Nyberg about this...
  • 10:16
    Nyberg: It would have been impossible for banks to provide those amounts of credit to those small number of people unless everybody directly or indirectly thought it was ok. Fact real estate market supported by banks and budgetary means meant that a lot of people had direct or indirect interest in real estate market continuing to go up. There was no force to reduce that kind of support.  
  • 10:17
    Nyberg: Main business of banks is to support enterprises and households. For banks to be able to work well they need to be able to access funds from depositors and the markets which is impossible if they are not seen as solvent  
  • 10:18
    Nyberg: I don't think it is fair to say people partied but they lived a bit better than they might have done because of the bubble
  • 10:19
    Doherty: 50 per cent of Anglo loan book went to 20 people. 51 per cent of INBS went to 25 people
  • 10:19
    Nyberg: If you have a systemic crisis you have everybody involved, including households. It doesn't imply the households caused the crisis but they are involved.  
  • 10:20
    Doherty: Why did lending increase sharply from 2005 onwards?
  • 10:21
    Nyberg: Anglo was a "monoline" bank financing big developers. It tried to fulfill needs of customers and identified greater needs in their customer base
  • 10:21
    Doherty: Report silent in relation to government role in crisis. Can you elaborate?
  • 10:22
    Nyberg: we were asked to look at financial issues. Department of Finance wasn't very much into financial stability issues. They were remit of Financial Regulator and Central Bank. As far as commission could determine the department did not interfere
  • 10:25
  • 10:28
    Nyberg: People we are talking about here (in banks or regulatory roles) are smart but it is very difficult...you can doubt in the beginning but once they are unproven year after year you change your mind.  
  • 10:28
    Doherty is stood down after his 20 minutes and Fine Gael's Eoghan Murphy steps in.  
  • 10:29
    Murphy: It should have been clear to Central Bank and Financial Regulator what was happening?
  • 10:30
    Nyberg: They didn't act. Comparative institutions in other countires or internationally did not act either.  
  • 10:31
  • 10:33
    Nyberg: If crisis had been in Ireland only would it have been cheaper? The commission did not think that through as it wasn't the case.  
  • 10:39
  • 10:39
    Nyberg: banks wanted to grow.  
  • 10:40
    Nyberg: lender responsible for judging the future solvency of the borrower and borrower for judging his ability to repay
  • 10:41
    Murphy: Report says "vigilant authorities" should have been more worried by end of 2005.  
  • 10:42

    Nyberg: It seemed to us that most of the information was out in the open either in bank annual reports or public statistics. Some was anecdotal evidence so it wasn't all that difficult to find signs that you should stop.


    Murphy: It was obvious?


    Nyberg: Objectively it was obvious.  

  • 10:44
    Nyberg: There were quite a lot of breaches of governance rules which the Financial Regulator generally thought was important. Particularly in the two problem banks. What regulator did was at times noted it but to a very large extent started corresponding back and forth and stated what banks should do but didn't check they did it. They didn't force the banks to do it using less pleasant methods which they can use if they think something is important.  
  • 10:44
    Murphy: Wasn't a lack of power?
  • 10:44
    Nyberg: In the view of the commission, no.  
  • 10:48
    Nyberg: If either Central Bank directors or board of Financial Regulator was convinced something needed to be done, they could have communicated. Department of Finance was also represented there. If there had been serious doubts in these institutions those questions would have come up.  
  • 10:49
    Nyberg: Contrarian thinking not popular in this time.  
  • 10:50
    Murphy's time is up now. Ciaran Lynch asking a question before the next member starts into their time.  
  • 10:51
    Lynch: was there a cultural change where short term borrowing was used to cover long term lending?
  • 10:52
    Nyberg: There were in each bank funding committees that decided what kind of lending was needed
  • 10:52
    Fine Gael's Michael D'Arcy up next. He asks how bad was the Irish banking sector's misjudgement of risk?
  • 10:53
    Nyberg: Lets put it this way, judging from the consequences which were larger in Ireland than in many other places, the Irish institutions were pretty good at misjudging risk.  
  • 10:55
    Nyberg: the decision makers decided the central assumption was correct and assumed the banks were solvent.  
  • 10:57
    D'Arcy: Establishment of Nama - €62bn of €72bn was with 190 people. Haircut of 60 per cent on these loans when taken. What are your views on, in a 16 month period, we could have a 60 per cent reduction in the value of the loans?  
  • 10:57
    Nyberg: All changes have an immediate effect on the value of an asset.  
  • 10:59
    Nyberg: as soon as something happens the assets go up or down. What happened in early 2009 was that the assumption was all banks were solvent and their liquidity problems were temporary. That changed. The economic situation outside Ireland deteriorated and it got worse in Ireland too and that had immediate effects on the bank's assets  
  • 10:59
    Nyberg: If a bank is exposed to real estate and the real estate goes down, the assets go down too.
  • 11:00
    D'Arcy: cites line in report on a "national speculative mania".  
  • 11:02
    Nyberg: The commission does not imply that occurred. A lot of people in many different ways...enjoyed benefits of low cost loans and access to investment housing. Doesn't mean they partied but means the boom and bubble made them feel their lives were better. Crash meant they could no longer finance that. It is quite true the costs of the crisis are not necessarily distributed in same way benefits were shared.
  • 11:02
    Meeting is suspended for 15 minutes. Little break at 11am.  
  • 11:03
  • 11:12
    Here's an early story on what has transpired so far in the banking inquiry.
  • 11:14
    Here's a piece by Ciaran Hancock asking if the inquiry has to capability to provide the answers people really want about what went wrong in the economy
  • 11:18
    Banking Inquiry member Michael McGrath yesterday said this "context phase" of the inquiry was essentially "shadowboxing" ahead of the real meat of the event when bankers, politicians and regulators of the time will be dragged over the coals in the "nexus phase" in the spring. His preference was for a Leveson-style inquiry by a retired judge that would have been less constrained and able to make findings against people. His fear was that a legal challenge or a general election could bring the process to a stop. Shane Ross was on RTE PrimeTime last night and was highly critical of the inquiry setup and believed it could become politicised in the run up to an election. We'll have to wait and see....
  • 11:19
  • 11:21

    Regarding the earlier post on Shane Ross having concerns, Mr Lynch said in his opening remarks that "this inquiry is an opportunity to leave our club jerseys at the committee room door and to do an important job of work on behalf of the Irish people. They deserve nothing less".

  • 11:22
    We're back. Marc MacSharry is up next. Asks for yes/no answering from Nyberg and turns to auditing and regulation.  
  • 11:22
    MacSharry is a Fianna Fail senator.  
  • 11:23
    Nyberg: Banks expected to act in such a way that they stayed solvent. Supervisors respected banks views.  
  • 11:24
    MacSharry: Crisis here not unique but you did mention specific differences. The fact we had 2% money from ECB and 10.5% growth rates was a recipe for disaster?  
  • 11:25
    MacSharry: Now we have 0% interest rates and growth projections of 6%. Will a small country like Ireland have tools in the toolbox to prevent such a catastrophe again given its minor share of the Eurozone?
  • 11:27
    After a long winded question, Lynch tells MacSharry to allow time for answers.  
  • 11:30
    Nyberg: This is not something commission looked at extensively. The Euro and indeed all currency unions require that individual countries adapt to the only central bank policy (ECB) that there is. If it isn't suitable for Ireland or another country one has to adapt domestically. This can be done through fiscal and supervisory policies available to domestic economy. I'm not able to say why ECB followed policy it did but we do know that neither ECB, EU, IMF or others foresaaw the crisis that came. Growth in overseas bank lending hailed as a victory for union rather than a risk to bank balance sheets. EU and ECB no better or worse than a lot of institutions.  
  • 11:30
    MacSharry: You said your commission had limitations in what it could examine. Will it be a hindrance or a benefit that ECB has excluded itself?
  • 11:32
    Nyberg: A wide ranging investigation of a systemic issue better than a limited one. A line has to be drawn somewhere and I would imagine the committee will have to make up its own mind on whether the views of ECB at time of guarantee were vital. They might have been more important later, that is possible, but what the commission found out was that there were talks between ECB and Central Bank prior to the guarantee.  
  • 11:32
    Nyberg: Yes and no (as to whether it will be a hindrance)
  • 11:34
    MacSharry is stood down. Fine Gael's John Paul Phelan up next. He asks Nyberg about a 2013 radio interview where he questioned what might come from the inquiry.  
  • 11:35
    Nyberg: I was not misquoted. I might have been somewhat brief. I intended to convey that in my view the causes of the Irish crisis are well known. Several reports into matter and investigations in other countries which support view that there are common factors in systemic crises that are not unique to Ireland. My view then and now is that it is unlikely something really exciting and new will emerge.  
  • 11:37
    Phelan now turns to role of external auditors, who Nyberg report says did not know more or less than anyone else. Phelan asks if he was surprised they did not know more?  
  • 11:39
    Nyberg: The fact that there was a systemic crisis and many banks had made bad loans and had governance issues means they could not have known better. Big auditor instituions are represented all over the world and as such one could make a case that they should, if not in Irish companies but other parts of organisations, have more than local banks. It was unexpected that the international experience that the big auditing firms do have wasn't used more. One can put same question to central banks who have global exposure.  
  • 11:40
    Nyberg: Did not look in depth at auditors activities in other countries but judging from fact that all banks in other countries had auditing firms, in some cases the same, there wasn't such a big difference in other countries but that is just a guess
  • 11:42
    Nyberg: There were a lot of signs that things were not ok that the auditors did not pick up. Difficult to say somebody is better or worse than somebody else.
  • 11:42
    Phelan: Did you speak to auditors? Junior auditors who were going into the institutions?
  • 11:43
    Nyberg: We called in the institutions and most did send someone (to the commission)
  • 11:43
    Phelan's time is up. Lynch now asking a question before next inquiry member steps in.  
  • 11:44
  • 11:45
    Nyberg: The message the commission picked up from various sources was banks as well as others felt the approach taken by the bank was their business. Authorities supposed to ensure risk management committees and procedures were ok so the banks were able to handle the risk that came from their business in a professional manner. "That was the business of the authorities".
  • 11:48
    Susan O'Keeffe, a Labour senator and the only woman on the inquiry team, is up now. Asks Nyberg if he spoke to someone from ECB? He says it was not among the institutions under his commission's remit.
  • 11:49
    O'Keeffe asks if politicians were interviewed by his commission. Nyberg says they were.  
  • 11:49
    Nyberg: When the report was finished I felt anything of any consequnce I had been told was reflected in it. Input by politicians or directors has not be left out.  
  • 11:50
    Nyberg: I chose everybody we interviewed.  
  • 11:50
    O'Keeffe asks if any findings were sent to gardai?
  • 11:51
    Nyberg: Commission told by legal advisors that anything under investigation or that could come under investigation should be excluded.  
  • 11:53
    O'Keeffe: Your statement says losses a result of ignorance or lack of understanding. We'd say it is negligence and pocket lining and failure to take note of risks. Asks how he came to conclusion?
  • 11:54
    Nyberg: I don't see any conflict. What seems difficult to understand now was widely seen then as normal behaviour not only by banks but also by observers. One sign of the lack of bad intent is that very many banking executives lost jobs and had loans to to buy shares in own banks and buy real estate.  
  • 11:55
    Nyberg: Accusing them of negligence implies a wilfullness.
  • 11:56
    O'Keeffe: Did resignations of auditors come up?
  • 11:57
    Nyberg: It did come up during discussions but as we know no auditor resigned. The problem is that an auditor can't really provide anything but a clean audit to a bank. If it is anything but clean the bank cannot function.
  • 11:58
    Nyberg: If the auditor finds problems in the bank it implies big difficulties for the bank if they become public. Auditor presents in a non-public form or if the bank is unwilling to act the auditor resigns.
  • 12:00

    O'Keeffe: Contrarians sanctioned? How did you know?


    Nyberg: It came out in interviews. Among sanctions we heard of are things like professional advancement, remuneration and things like that. A subjective issue. Is somebody sanctioned because of what they say or who they are. Every contrarian is not as spectacularly right as in this case. They are often wrong. In this case, those who thought excess risk was being taken were right but a few years earlier they might not have been considered right.  

  • 12:00
    Socialist TD Joe Higgins takes the baton from Susan O'Keeffe.  
  • 12:01
    Higgins asks about profits and Nyberg says thinking at time was banks should be as profitable as they could be, hence the popularity of real estate with them.
  • 12:02
    Nyberg: The general level of profit was known and the stress on profitability on profit and growth was obvious from a run through of the board minutes of several banks.  
  • 12:03
    Higgins: Anglo was highly profitable and others were chasing?  
  • 12:03
    Nyberg: They did try to become more profitable so Anglo wouldn't look too successful. Others wanted similar levels of profitability and growth.  
  • 12:04

    Higgins: Was there profiteering? No restraints on degree of profit they can chase?


    Nyberg: I can't make a judgement and the commission did not on whether profits were too large or not.  

  • 12:05
    Lynch intervenes and says Anglo business model was followed by others. Were there questions about sustainability of this approach?
  • 12:06
    Nyberg: It was considered, up until the eve of crisis, sound
  • 12:07
    Higgins moves on to escalating house prices. People found themselves facing 40 year mortgages as prices went crazy. Is this rise not attributed to excessive profit taking with no consideration for social effect on people buying houses?  
  • 12:07
    Higgins says Nyberg spoke to people who should have been elbowing bubble blowers in the ribs. Did anybody acknowledge the cost to workers trying to buy a home?
  • 12:08
    Nyberg: House price increase was the result of speculation by those who had the possibility to do so and them being financed by banks. Those who bought real estate at high prices did so willingly. They took the risk. Those who did not sell lost money. Both the rich and poor did so.  
  • 12:10
    Nyberg: The reaction of people involved in lending varied very much. Some thought everything had been going well until American crisis. Others were deeply shocked and didn't understand how they couldn't have seen it at the time. It was all over the place, the reaction.  
  • 12:10
  • 12:11

    Higgins queries logic of Nyberg putting somebody trying to buy a home on the same level as a bank speculator.  

  • 12:13
    Higgins: Can financial markets hold governments to markets? Did this happen before guarantee? Is it right they have power over governments?
  • 12:13
    Nyberg: Regardless of what one thinks, that was what was believed. It was the prevailing belief in Ireland and in other countries.  
  • 12:15
    Nyberg: Thousands of academics making studies on why crisis happened. Those who take part in the markets have to be sure governments can pay back what they borrow. To that extent governments are not free to do whatever they want to.  
  • 12:16
    Nyberg: Most people normally do not speculate. In Ireland and elsewhere there are big and small speculators. He was told by sources there were people who borrowed to buy real estate in and outside Ireland in hope of profit.
  • 12:17
    Nyberg: A lot of activity for people who wanted to be seen as good professionals who did better than their competitors.  
  • 12:18
    Fianna Fail TD Michael McGrath up now. Asks about night of bank guarantee. What was at stake on that night?
  • 12:19
    Nyberg: I think that the commission report is quite clear on that even if it is a little indirect. What the people around the table that night were concerned with would be what would happen when market opened the next day. Wanted to find ways of ensuring the banks could open their doors, provide depositors with money, give customers loans and fund themselves both in domestic and international markets in a normal manner. The risk they tried to avoid was a situation where none of this would be possible.  
  • 12:20
    McGrath: Was there a risk a bank might not be able to open?
  • 12:22
    Nyberg: They certainly believed the risk of one bank failing would have killed confidence in others. This would have created either immediate or near term funding issues. The risk was of contagion if one bank was let go. Personally, I find it was very much the same thing Finnish decision makers agonised over in the Finnish crisis. Government there also took on quite a lot of risk.
  • 12:23
    Nyberg: Government made decison they did. Is it the best they could have taken? Clearly no. Many would have said an orderly resolution of the bank with big problems but that would have required a different policy years in advance.  
  • 12:24
    McGrath asks about commission's report view of regulator. Says report is critical of appetite to prosecute challenges. Why were authorities unwilling to use their powers?
  • 12:25
  • 12:26
  • 12:27
    McGrath: Losses not imposed on senior bondholders. Idea rebuffed by ECB. Any opinion on issue? Should ECB account for their role?
  • 12:28
    Nyberg: Only thing I would offer is statement that ECB sees its role as a guarantor of financial stability in the whole of the EU. When it looks at single countries it does through that lens.
  • 12:30
    Nyberg: If a central bank wants to influence another institution there are ways.  
  • 12:31
    Senator Sean D Barrett up now.  
  • 12:31
    He asks about Department of Finance briefing notes prepared against Prof Morgan Kelly
  • 12:33
  • 12:34
    Nyberg: At time before crisis it was hard to know which countries would and would not be hit.  
  • 12:36
    Nyberg: A large part of the report is built on the experience I got from crisis in Finland. To my initial surprise I also found (similar issues) here.  
  • 12:36
  • 12:37
    Ciaran Lynch calls Barrett out over apparent leading in some of his questions.
  • 12:38
  • 12:39
    Barrett stands down ahead of time. Fine Gael TD Kieran O'Donnell is last member up to ask questions.  
  • 12:42
    Nyberg: Starting crisis management in 2006 was pretty late. A lot of bank losses in the balance by then. They were not insolvent but the risks were there.  
  • 12:43
    O'Donnell: Did you look at work of domestic standing group?
  • 12:44
    Nyberg: Cooperative institution. Members represented their view and reported back to their institution. Not a decision making institution.  
  • 12:45
    FYI - (The Domestic Standing Group was formed by the Regulator and Central Bank, on EU advice, to keep watch over the stability of our financial sector.)
  • 12:47
    Nyberg: The DSG allowed operational people to meet. It is correct it was involved with a resolution regime but it did not work on the regime. It was the Department of Finance who did after Northern Rock issues in UK. Department brought it to DSG for discussion and others did not think it a good idea because (1) banks were solvent and (2) it was a very complex legislation as such a regime meant banks could be taken over by Government even before they were insolvent. Means government takes something still of value to owners and shareholder.  
  • 12:49

    Nyberg: Does not know enough about speed of Irish politics to say if such a resolution measure could have been introduced to stop situation getting worse.  



    O'Donnell: You're a "wily fox"

  • 12:54
    In wrapping up phase now, back to Pearse Doherty for a few final questions. He asks if Irish crisis was home grown.  
  • 12:54
    Nyberg: Yes. Nobody forced Irish banks to grow. Nobody forced Irish companies or households to invest or borrrow. It was voluntary.  
  • 12:55
    Doherty asks which organisations were less cooperative towards Nyberg's inquiry. He declines to name but says things turned out well in the end and got required information, even if it took a bit longer.  
  • 12:55
    Doherty notes criticism in Nyberg report of Financial Regulator's office. Was it fit for purpose.
  • 12:57
    Nyberg: There were no technical problems. Had smart people and resources but they looked at different things to what they should have looked at. Could happen to anyone. Should have been looking at concentration of credit and how banks in practice used risk mitigation procedures.  
  • 12:57
    Nyberg: Regulator should have looked at changes in how lending criteria was sought.  
  • 12:58
    Doherty asks if any other institution would have had 50 per cent of loan book to 20 people as was case with Anglo. Nyberg says perhaps in Iceland.  
  • 12:59
    Nyberg: You are asking indirectly why nobody stopped this. It is one of the big conundrums. If media or parliament committee had said stop, it might have done. If a risk mitigating institution had seen what we do now there would have been no systemic crisis.  
  • 13:02
    Nyberg: Says strict timetable his commission was an issue. Made a choice what they looked for and did not. He knew banks recorded calls and says if we thought we had time to go through Anglo Tapes we would have asked for them. Simply wasn't time left after interviews and documents. Doesn't know if the content of tapes would have made any difference.  
  • 13:02
    Murphy back in now for a few more questions.  
  • 13:04
    He notes Nyberg did not finish his opening statement. Asks about foreign bank activities in Ireland. Nyberg says the foreign owned banks (Ulster for example) were competing with irish ones but State did not have to come in in those cases.  
  • 13:06
    Lynch says there is a saying in ireland that a meeting is never over "not only until everything has been said, but everyone has said something". A few more questions to come....
  • 13:07
    One question and one minute each...allegedly.
  • 13:08
    MacSharry asks about measures to control interest rates. Nyberg says interest rates effect economies in several ways - such as flow of capital coming in and changes in demand.  
  • 13:11

    D'Arcy asks about Central Bank being in contact with ECB before guarantee, Nama establishment and then bailout, and should ECB before them.

    Nyberg: His personal opinion is that they should ask Irish authorities about their discussion with ECB and make an assessment. One makes use of what one can and then has to use ones head.  

  • 13:12
    Phelan picks row with Lynch for intervening during his minute.  
  • 13:13

    Asks Nyberg about his use of term hubristic company culture in relation to Anglo tapes. Lynch tells him not to put words in Mr Nyberg's mouth as his English is quite proficient.  



  • 13:13
    Nyberg: American sayng of masters of the universe. Maybe his comment relates to that
  • 13:14
    O'Keeffe: Some say guarantee came because of closeness between bankers and politicians. What did you make of relationship?
  • 13:15

    Nyberg: I was aware of discussion. Of all the interviews I had, only one interviewee referred to linkages between politicians and bankers and funnily it did not concern his own bank. Otherwise I found no evidence of kind of relations you are referring to. Doesn't mean they did not exist. I just didn't find it.  

  • 13:17
    Higgins asks about Nyberg Report noting Anglo being admired domestically and abroad and being lauded across the board for its moxy. Asks about role of mainstream media in bubble being blown up.  
  • 13:18
    Nyberg: They reported positively on banks ,on real estate and on everything to do with tiger. Very few people read baning or offical reports. Committee looking into it a welcome thing.  
  • 13:19
    Michael McGrath asks Nyberg about his sense of the engagement the inquiry is likely to get from main actors in crisis given it is in public.  
  • 13:21
    Nyberg says only thing that was private in his commission was the names and that it tried to give as clear an account as possible without naming names. His feeling is that anonymity was important for getting engagement and discussing sensitive issues which are painful for some. As time goes by, there might be a sense some want to have their say in public because general discussion isn't always balanced. Others might not wish to do so.  
  • 13:22
    Nyberg says his commission had power to compel a witness to come in but never had to use them.  
  • 13:22
  • 13:26
    Lynch tells O'Donnell he wants no showboating after question about who contrarians he mentioned are. Nyberg says Morgan Kelly was one.
  • 13:28

    Chairman Lynch thanks Nyberg for his contribution and says committee hopes it can add value to his work having heard from him.  


    Inquiry goes into private session and will resume tomorrow at 9.15am.  

  • 13:29
    That's day one of the long awaited inquiry over and done with. Nyberg a cooperative witness and willing to answer questions but the vast majority of what he said was contained in his original report.  
  • 13:31

    Interesting to see Michael McGrath (who was a member of the Fianna Fail government at time of the bank guarantee) asking about the night of the guarantee itself.  

    Same goes for Socialist TD Joe Higgins taking up Nyberg's point about borrowers being as guilty of lenders in the grand scheme of things.  

    Did members lean towards certain aspects of the story by design or coincidence?

  • 13:36
    That's all for today. Thanks for reading and do keep an eye on irishtimes.com for in depth reports and analysis of the bank inquiry.