Patrick Honohan: favours 'some sort' of official inquiry into the banks

An official inquiry into the causes of the banking and economic crisis looks further away than ever, after the head of the main Oireachtas regulatory committee said that a constitutional referendum would be needed to ensure any probe would uncover the truth.

Michael Moynihan, the Fianna Fáil chair of the senior Oireachtas Economic and Regulatory Affairs committee said that the Dáil committees would be hamstrung in its ability to question bankers by the limited powers they currently hold.

His committee, which has been one of the more active and high-profile committees to investigate aspects of the financial services industry and to quiz bankers, has been tipped as the most likely to conduct an official probe.

Moynihan said he would "relish" chairing any parliamentary inquiry into the crisis but that there were "legal problems" with its limited investigative powers.

He said he feared that the committee investigation would be diverted by legal challenges and effectively sabotaged by lawyers working on behalf of bankers.

A constitutional referendum to bolster the power of Dáil committees would be required, Moynihan said.

"Any inquiry that does not apportion blame would not be worth its salt," he said.

Patrick Honohan, the new governor at the Central Bank, started the ball rolling last month when he told Moynihan's committee that he favoured "some sort" of official inquiry into the banks. He said he expected "in time" that the Oireachtas would set up an inquiry because aspects of the crisis were "still hard to understand". Honohan subsequently told RTé TV's Week in Politics programme the inquiry would need to go beyond the "glib" explanations for the crisis.

On Friday, a spokeswoman for the Financial Regulator said the governor "was pretty clear" in his desire for an inquiry into the causes of the banking crisis. Minister for Finance Brian Lenihan said last week that any inquiry should not begin until after the recapitalisation of the banks had been completed.