Patrick Honohan makes his first public outing as governor of the Central Bank on Tuesday, and for the economy and the financial system, it's a seminal moment.
While every day one hears the banal observation that "we're all to blame for the financial crisis", the reality is that a proper functioning regulatory system could have spared the citizens of this state a lot of unnecessary pain, adjustment and wealth destruction.
While systems are important, people are even more so. Honohan's writings on what brought about the financial and banking collapse have been eloquent, forceful and deadly accurate. The Irish banks, Honohan has written, got caught up in a type of "mass psychology" that left them putting 60% of their assets in a solitary asset class, property.
Honohan has wondered, like the rest of us, how some institutions were able to survive 200 years without encountering a property-related bust, then left themselves so hopelessly exposed in just one decade. Unfortunately, Honohan was sitting out this period in the groves of academe and has arrived into the Central Bank very much after the financial train wreck. He needs to make sure he doesn't now just end up taking witness statements.
Finance minister Brian Lenihan has of course parachuted Honohan into a new structure, and shortly the former academic will be joined by a director of financial supervision. Together, one hopes, they will have a more successful period on Dame Street than their predecessors, John Hurley and Patrick Neary.
However the legacy of the Hurley/Neary era isn't going to be easily brushed away. An alarming number of people from the old regulatory structure that comprised the Central Bank and the Financial Regulator are simply passing over to the new structure, the Central Bank of Ireland Commission. Many will probably not even have to move desks.
While nobody wants to see people gratuitously ejected from their posts, this idea of simply moving senior officials from a failed entity to a new body will disquiet many people. The charge sheet for those who served during the past two years is considerable.
Here are just some of the events that happened on these people's watch: the Anglo 'golden circle' loans; the circular deposits between Anglo and Irish Life & Permanent; the Seán FitzPatrick loans; the silly St Patrick's Day massacre investigation; and the CFD purchases in Anglo Irish Bank by businessman Seán Quinn.
But ignore all this for a moment. The biggest stain on the record of senior staff at the Financial Regulator and the Central Bank is their failure to stop the banks from leveraging up their balance sheets with foreign borrowings and using them to ramp up a domestic property bubble that eventually became the second-largest bubble in the developed world. As regulatory misses go, this was a whopper.
Thankfully Honohan, more than anyone, has been critical of the Financial Regulator's decisions during this period. He will now chair what is known as the Central Bank Commission which, according to government outpourings, is going to be a "fully integrated regulatory institution" responsible for not only supervision of individual firms, but the stability of the entire financial system.
The descriptions of this institution are a little like an architect's drawing. They look great on paper, but the ultimate test is who is the architect? Unfortunately, the government decided to build the new regulatory system out of the ashes of the old one. The key figure they consulted was – you guessed it – the old Central Bank, including the governor, John Hurley. This certainly gives this writer misgivings.
Last week the Central Bank was on slightly less contentious ground, making economic forecasts once again. It said Ireland was over the worst of the crisis and growth in 2011 could be anticipated. These assertions were voiced by the bank's economic team, which in 2008 was one of the worst forecasting outfits putting out research on this island.
For example, the Central Bank thought Ireland would grow by 3% in GDP terms in 2008, a pretty awful prediction considering that the crises in wholesale bank funding and the US property market actually started in early to mid-2007.
In other words, we are getting a new organisation name, and a new leader, but those who made patchy forecasts remain at the helm, crunching their new numbers, and those who made patchy decisions on bank regulation also hang onto their jobs. Honohan may be a new broom – he may even be tough enough to turn things around – but the omens are not encouraging.