Looks like we were easy pickings for the vultures of the banking world
WHILE the early days of the banking inquiry have been roundly slated by the more jaded members of the national media as both under- whelming and tedious, the initial witnesses have already delivered some staggering comments. The inquiry, which has heard just two days of evidence so far, is unlikely to throw up any major surprises when it comes to explaining the root causes of Ireland’s spectacular banking crash but some of the background information that has already come to light is very revealing, particularly in relation to the lack of appropriate qualifications among staff at the Department of Finance.
Witness Rob Wright, the former Secretary General of Finance in Canada, who authored a report on the department in 2010, outlined some shocking details. According to Mr Wright, during Ireland’s boom years and as the crash unfolded just 39 of the Department of Finance’s 542 staff were trained to Masters Degree level in economics. To put this in context - just seven per cent of the Department of Finance’s Staff were educated to Masters level in economics compared to 60 per cent of staff in the equivalent department in Canada.
In his report Mr Wright, an acknowledged expert in his field, found that the level of expertise and qualifications in the Department of Finance was ”extraordinarily low by international standards.” Given this evidence it is perhaps easier to understand just how some of Ireland’s top bankers were able to run rings around the government and senior officials of the day in the lead up to the ill-fated bank guarantee. It also goes some way to explaining just how Ireland’s property sector and the associated spending frenzy was allowed to get so out of control.
The lack of suitable expertise was not restricted to the Department of Finance; our legislators too were largely unqualified when it came to economic matters. Of the 166 TDs in the Dáil in the early days of the economic crisis only two, Joan Burton and Richard Bruton, had any formal qualifications in economics. That they were both on the opposition benches at the time probably did not help matters.
Obviously not every official in every department needs to have a qualification in that department’s area of responsibility, but in a section as crucially important as finance the need for expertise is markedly higher. That only seven per cent of staff in the department charged with advising the minister and the government had suitable qualifications is deeply worrying.
One wonders if bankers who lied to the government in the run up to the bank guarantee were aware of this and, if so, was it part of the reason they were so confident that their grossly inaccurate figures would be accepted.
We can only hope that this issue will be rectified but sadly six years after the crash little appears to have been done. According to Rob Wright there are now almost 100 employees with an economics background at the department. That is an improvement, but it still represents just 18 per cent of the staff and far below the 60 per cent figure in Mr Wright’s home country.