Lenihan: Taoiseach not solely responsible for banking crisis
Finance Minister Brian Lenihan has said the Taoiseach cannot bear sole responsiblilty for the failures of successive administrations that led to the banking crisis.
Fine Gael will table a motion of no confidence in Brian Cowen in the Dáil this morning after two reports into the banking crisis, published yesterday, highlighted his budgets as Finance Minister as adding 'fuel to the fire' in the property boom.
But Minister Lenihan said the Government is dealing with the crisis and there will be no amnesty for their decisions when it comes to the findings of the banking inquiry.
He also said Taoiseach Brian Cowen is doing his job.
"The Taoiseach was chosen and elected after the departure and resignation of Bertie Ahern," Minister Lenihan said.
"He is doing his job as Taoiseach and I don't accept that he bears sole or exclusive responsibility for what happened.
"Hindsight is a wonderful thing," Minister Lenihan added. "We had a period of unrivalled growth that went on from the early 1990s up to 2006.
"In retropect now, it is clear that we were far too dependant on the tax receipts from a construction boom. That has led to a serious economic collapse."
A Fine Gael party spokesman said last night Mr Kenny wanted to force the Government to face up to its responsibilities in the wake of international experts’ findings that the crisis was a result of homegrown decisions rather than the global economic nosedive.
“It is clear now that Brian Cowen was the chief architect of the catastrophic failures of policy that led directly to our current economic crisis,” the spokesman added.
“He misled the Irish public repeatedly as to the origins of the crisis and his actions in delivering inappropriate budgets year after year and his inaction in driving a tougher regulatory regime for our financial sector are all central to our home-made recession.
“The public have been lumbered now with massive burdens for bailing out reckless banks while in the Dáil their representatives have been silenced by a cynical Government trying to cover up their record of failure.”
Findings by former International Monetary Fund officials Klaus Regling and Max Watson in one report published yesterday delivered a major blow to the Taoiseach.
In a second damning report, Central Bank governor Patrick Honohan also blames reckless banking chiefs and the financial regulator for being afraid to “spoil the party”.
Mr Cowen has said he takes full responsibility for his role as former finance minister in the run-up to the crisis and accepted he did not take the right actions to prevent it.
But the Taoiseach refused to shoulder all the blame and insisted many mistakes made were based on fundamentally flawed projections from the Central Bank, the International Monetary Fund (IMF) and the OECD.
Published simultaneously 10 days after being handed to the Government, the two reports will kick-start an official inquiry into the banking crisis to be set up by the end of the month.
In his probe, Prof Honohan said banking chiefs, the Government and the financial services watchdog were responsible for a “credit-fuelled property market and construction frenzy” that was central to the catastrophe.
The failure of investment bank Lehman Brothers was not responsible for the crisis, he found.
Meanwhile, Mr Regling and Mr Watson said alarm bells should have sounded over the property bubble and reckless lending from as far back as 2003.
Their report found that careful management of the public finances and banking sector could have helped steer the country towards a “soft landing” when the recession came.
But rather than keeping a tight control on the boom, the Government spent the money – from taxes on property and consumer spending – as it came in with give-away Budgets while tax cuts left the State coffers in an “increasingly fragile” position, according to the investigation.
