At the MacGill Summer School last July, Dermot Gleeson highlighted the corrosive influence that Anglo had on banking. He said that the constant praise for Anglo, as "a competitor who appears to be striding ahead of you, taking customers" had an effect. AIB and (to a lesser extent) Bank of Ireland tried to emulate Anglo. The herd mentality had set in.

The same applied in the home loans market. Bank of Scotland arrived with its tracker, 110% and long-term mortgages. Gleeson, interestingly, also referred to "the seriously detrimental effect that the monopoly power in the professions was having at the time". An inside circle of bankers, lawyers, accountants and government agencies held all the power to oversee one another. Any solution must be broad-based if this circle of professions is to resume its intended function of competitive supervision.

The legal profession knew serious problems were brewing. In December 2005 the Law Society was obliged to issue a warning that it was improper for the same solicitor to act for both builder and house buyer. Nonetheless, many of today's owners bought their homes with the builder's solicitor acting for both sides and with money arranged by the builder's bank.

There were dubious practices in accountancy too. The International Financial Reporting Standards were adopted to provide "greater flexibility" with corporate returns. The FSA in England expressed grave concern at the use of "mark to market" procedures. Efforts to present accounts as positively as possible became paramount. Projected returns were brought forward to actual year-on profits. Many loans were approved with speculative or no security. AIB advanced €544 m to the Zoe group without checking legal title to securities or having documents signed by the borrowers. "Astonishing" and "extraordinary", said the High Court. But evidence suggests that the Zoe situation was not extraordinary.

We are told that the same firm can act for both sides in a transaction because it can build 'Chinese walls'. But we should know from experience that there are no foundations for such walls in Ireland. Credit-risk analysis – based on a borrower's character, on the affordability and purpose of the loan, on ability to repay and on the level of security offered – was systematically dismantled by bankers in pursuit of growth.

When the crisis hit, banks suddenly rediscovered the value of the old rules, resulting in severe financial and personal discomfort for many customers. But do they have any credibility in applying the old rules to themselves? No, the solution must be based on a reinstitution of supervision, transparency, governance and growth.

At least one if not two, of the taoiseach's nominees to the Seanad should be replaced by experts in banking and regulation, and appointed junior ministers at the Department and held accountable through the Seanad.

Meanwhile, the proposed procedures for the banking inquiry could yet be effective. Two preliminary reports make sense. And the commission must explore connected services such as those of lawyers and accountants as well as bankers and politicians. Issues such as privilege and confidentiality must be addressed up front.

Bonuses in banking can never be the same as in other sectors; they must be earned over prolonged periods and not on short-term "killings". Share options must be banned and the focus must return to long-term shareholder value. The multiplicity of non-banking services must be curtailed because these distract from the core business of banks.

A national recovery bank is essential and Anglo is ideal for this. The 'National Anglo Recovery Bank' must step in here as a "secondary lender" especially to SMEs which are at risk due to lack of liquidity.

A balance must be struck between effective regulation and appropriate risk-taking. Transparency, disclosure and trust must win out.

A year ago, Grant Thornton reported that "camaraderie over competence defines a large chunk of Irish corporate culture". Cross-directorships are commonplace. The histories of the boards of banks and bodies such as the Dublin Docklands Development Authority speak volumes.

Separately, Nama still lacks three important ingredients: proper risk-sharing, incentive and transparency. Conflicts of interest abound. Nama is here but must be improved.

A friend said Nama will benefit more from Anglo than from AIB loans because Anglo has a better property spread. He may be right. We can only wait and see. However, hard-pressed businesses and homeowners do not have that luxury.

Brian O'Callaghan is a solicitor and mediator