The Oireachtas (Irish Houses of Parliament) Joint Committee of Inquiry into the Banking Crisis has published a proposed framework for the inquiry plan, the different phases of the inquiry and draft terms of reference. The purpose of the inquiry is to inquire into the reasons why Ireland experienced a systemic banking crisis, including the political, economic, social, cultural, financial and behavioural factors and policies which impacted on, or contributed to, the crisis. The Committee will do this by investigating relevant matters relating to banking systems and practices, regulatory and supervisory systems and practices, crisis management systems and policy responses, and the preventative reforms implemented in the wake of the crisis. The time period for investigation is from the beginning of 1992 (effective implementation date of Basel I) to the end of 2013.
It is proposed that the Committee will have a number of specific powers including the power to take oral and written evidence (and to publish minutes of evidence taken in public and other documents) and the power to send for persons, papers and records. It is also proposed that the Committee will have the power to impose sanctions for non-cooperation. The proposal contains an extensive list of broad categories of potential witnesses, including employees of credit institutions, recipients of commercial loans, external auditors for credit institutions, the Central Bank, the European Central Bank, officials in the Department of Finance and Department of the Taoiseach, NAMA and the NTMA.
It is proposed however that the main public hearings will begin in March 2015 and that the Committee’s final report will be published by the end of November 2015.
The proposal has been submitted to the Committees on Procedure and Privileges of Dail Éireann and Seanad Éireann and remains subject to approval. Concerns have been expressed about the extent and timeframe of the inquiry and whether it is possible for the inquiry to conclude its work by the end of 2015. Concerns have also been expressed in relation to funding for the inquiry. However, it has been reported in the media that the Committee has started contacting potential witnesses and that emails requesting cooperation with the inquiry have been sent to a number of financial institutions.
Central Bank Inquiry
The Central Bank has announced the appointment of an Inquiry Panel which it has been reported will investigate possible breaches of banking rules. The Inquiry Panel has been established to conduct administrative sanction procedure inquiries pursuant to Part IIIC of the Central Bank Act 1942. The panel has 13 members, including judges, members of the legal profession, former and current financial regulators and members with experience in the financial sector. It is anticipated that the first bank to be reviewed by the Inquiry Panel will be Irish Nationwide.
The inquiry has the power to caution, reprimand or fine regulated entities up to €10 million or 10% of turnover. It can fine individuals up to €1 million provided this will not bankrupt them. It can also disqualify individuals from working in a regulated entity or revoke the authorisation of a regulated entity. The Central Bank has the power to publish the findings and sanctions imposed.