Don't bank on this lot to come clean on their own

[What_Goes_Up]

independent.ie/opinion/analy … 42492.html

Don’t bank on this lot to come clean on their own
Sunday April 18 2010

Nama, Lenihan and the new regulator must treat financial institutions with suspicion and hostility, writes Alan Ruddock

'The information given by banks did not turn out to be the reality," Brendan McDonagh, the chief executive of the National Asset Management Agency (Nama), said last week as he explained the workings of his agency to an Oireachtas committee.

McDonagh chose his words carefully. He did not call the banks liars or cheats – he said that “a lack of awareness and denial . . . was prevalent” – but the implication was clear: Ireland’s bankers, who remain in business because the State saved them from collapse, have lied to the government and its agencies from the very beginning of this financial crisis and they have kept lying all the way through.

It is possible to argue that leading executives of Allied Irish Banks, Bank of Ireland, Anglo Irish Bank and Irish Nationwide have simply been incompetent; that they never understood what their own banks had been doing for the previous few years, never understood the difficulty they were in and have been continually surprised by the unfolding disaster. If that is the case they deserve to be hung, drawn and quartered by their own shareholders.

It is possible, too, that they were so shell-shocked by disaster that they chose collective delusion over reality, but it is far simpler to believe that Ireland’s banks lied repeatedly to the government while extracting as much cash and guarantees as they needed to stay alive, and continued to lie to Nama about the quality of the loans they were handing over and even the number of loans that were actually being serviced by interest payments.

…(cont’d)