The refusal of the European Central Bank (ECB) to participate in the Oireachtas Banking Inquiry is completely unacceptable and is a kick in the teeth for the Irish people, according to Fianna Fáil Spokesperson on Finance Michael McGrath.
Deputy McGrath stated, “The decision of the ECB not to participate in the Oireachtas Banking Inquiry is an affront to democratic accountability and is an extremely serious blow to the Inquiry. The terms of reference of the Banking Inquiry specifically provides for an examination of the role of the ECB on the question of burden sharing with creditors. In the absence of the participation of the ECB, it will not be possible to properly address this important aspect of the Inquiry’s work.
“The involvement of the ECB in the Inquiry is not some sort of optional extra, it is fundamental to the work of the Inquiry. Any Oireachtas Banking Inquiry without the involvement of the ECB is seriously devalued and none of us want to see this scenario transpire. My view on this is absolutely clear – a credible and comprehensive Banking Inquiry requires the full participation and cooperation of the ECB. This means the same standard of accountability applying to the ECB as all other witnesses coming before the Inquiry – attendance at a public session and a willingness to take questions from committee members. Nothing less will do.
“It has been widely reported that the efforts of two successive governments, in 2010 and in 2011, to impose losses on senior bank bondholders were rebuffed by the ECB. The insistence of the ECB that all bondholders be repaid in full has, in my view, cost this State billions of euro. At the end of the original bank guarantee in September 2010, a total of €20bn of unsecured senior bank bonds came out of guarantee, including almost €5bn in respect of the former Anglo Irish Bank/Irish Nationwide. These were repaid in full because the ECB demanded it and now they do not want to be held accountable for the impact of their policies in Ireland.
“The role of the ECB is not limited to the question of burden sharing. The monetary policy pursued by the ECB in the period leading up to the banking crisis and the ECB position that no bank be allowed to fail in the Eurozone for fear of contagion are vital areas of the work being examined by the Oireachtas Banking Inquiry.
“This now becomes an issue for the government. The Taoiseach Enda Kenny needs to follow up on his words today. He needs to make immediate contact with the President of the ECB Mario Draghi and explain in the strongest possible terms the imperative of the ECB cooperating with the Irish Banking Inquiry. The Taoiseach needs to make it absolutely clear to Mr Draghi that the Irish people will accept nothing less than the full cooperation of the ECB with the Inquiry and this confirmation of this cooperation needs to be provided forthwith”.