View from Dublin: what’s changed after 10 years?
TEN years ago on September 30, we all woke up potentially on the hook for €440bn of bank liabilities. Not all of it was called upon, just €64bn, of which we will end up losing about €30bn.
It was indeed a fateful night when the blanket bank guarantee was introduced. A decade on, it is still debated as to whether it was one of the biggest financial blunders ever made by an Irish government.
Yet, with hindsight and cooler analysis many would go along with the findings of Donal Donovan and Antoin Murphy in The Fall of the Celtic Tiger, that the bank guarantee, “despite all of its costly consequences, appears to have been the least-worse alternative facing the government”.
Much has been learned. We won’t be doing that again in a hurry, for a start. Central Bank regulation has improved. Politicians and the media have a much more probative approach.
But the tracker mortgage debacle which followed wasn’t about managing risk but failing to act in the best long-term interests of both the customers and the banking institutions themselves.
It suggests that very little has really been learned.