Central Bank no longer fit for purpose and boss Lane out of his depth

THERE is some disagreement about precisely when, how and to whom, the murdering Soviet tyrant, Joseph Vissarionovich Stalin, actually said it.

But the main point is clear and it has resonance for the current tracker mortgage farrago. When Stalin was asked how his genocidal, repressive policies might play morally with the head of the Roman Catholic Church, who had true believers all across the Soviet territories, the dictator of the USSR from the 1920s to 1953, was more than dismissive.

“How many divisions does the Pope of Rome have?” Stalin asked rhetorically.

In real terms, it pits moral force against the cold reality of might. The Irish lending agencies, now in the gap of danger for abusing tracker mortgage holders, do not have ranks of armed soldiers.

But, experience teaches us that the banks more usually have recourse to law, early and often.

There is a certain Stalinist resonance for the ongoing scandal about the banks’ ill-treatment of people so peremptorily deprived of tracker mortgages with huge financial, personal and family consequences.

There is no lack of political agreement about fundamental injustices involved here; there is a huge political imperative that “something must be done”.

But paraphrasing Stalin, the banks and building societies may well ask: “What laws do Leo Varadkar and Paschal Donohoe actually have here?”

The Taoiseach Mr Varadkar used his trademark candour to condemn the banks’ abusive actions in recent days inside and outside the Dáil. He said the Government had lost patience and would turn up the heat.

Mr Varadkar created momentum in this scenario. He suggested that remedies were imminent.

Next week the Finance Minister Mr Donohoe will carpet the banks and tell them what he thinks of their reprehensible behaviour. There is talk of toughening laws and even an increased bank levy to fund compensation and restitution.

Under pressure from Fianna Fáil’s public spending spokesman, Dara Calleary, in the Dáil, the Education Minister, Richard Bruton, while speaking for the Government, repeated threats about a tougher bank levy to fund reparations to the estimated 30,000 tracker mortgage holders who were so cruelly ill-used.

A short while earlier, the TDs and senators of the Oireachtas finance committee were told by senior Central Bank officials that An Garda Síochána was on the case. Our now beleaguered police force has a proud record – but never in these realms.

Indeed, the Central Bank’s brightest and best, tasked among other things with defending citizens from the banks’ view they make and enforce all the rules, appear seriously out of their depth here.

There is more than a suggestion that the real awfulness happened in the years after the crash of 2008. There is a law relating to this which dates from August 2013. But laws in this realm are rarely retrospective. The noises off here are about “moral pressure” on the banks. What kind of result does recent history indicate we may expect from this?

The reality is that the lenders may well take a leaf from Stalin’s book and ask: “Show us all your laws?” This is all a high-risk issue for the Government.