To say that ‘they were asleep at the wheel’ is only cover-up, spin and white-wash. It is much more serious than that.
First, a quick discussion of what regulation is, and how simple it is to effect.
It is purely a monitoring of simple key variables and ratios that are very easily generated in the normal course of business. All that effective regulatory oversight requires is to ensure that these variables are kept within agreed limits.
Now, the regulator would have access to much more frequent and detailed information that the general public.
But, here is some of the information we the general public DO have access to.
It is only yearly, and obviously, the annual reports are massaged. But still, here is what they show. (taken from Anglo bank balance sheets, rather than their consolidated balance sheets).
1. Customer loans and deposits
Massive ramp up becoming very obvious around 2005, and corresponding increasing gap between the amount out on loan and deposit.
2. Interbank transfers
A very strange hicough around 2005, of the order of more than 5 billion euro.
3. Debt securities
Again, what the hell was happening around 2005-2006
4. Central bank cash and balances and financial derivatives
These only make an appearance on the balance sheets around 2005.
5. Share prices
Some major hicoughs around 2005 and again in 2006, before it started its precipitious decline in early 2007.(Iit was 2006 we heard the first rumour in the general public from a Dublin broker that there was ‘a very large short position’ on Anglo).
Anyway, I’ll come back to this post. It is critical to understand and grasp the implications of regulatory inaction, and the political impetus that engendered the situation.
The Indo is spinning like mad. They have to be pulled up on it.
The regulator and by implication the government must have known since 2005 of the serious problems building up in the system. They never acted to try and do something about it. They continually deny that they knew anything, which is patently false. We do not need a banking enquiry. - We need an inquiry into our government and key institutions, particularly the DOF, the regulator, the central bank, and the media.
So, to use the parlance of our government, what needs to be done is for the *‘frame of reference’ *for such an enquiry to be determined from a political impetus OUTSIDE the impetus that gave rise to the débâcle.
The most dangerous thing for the life of this country is to allow the government and media to set this ‘frame of reference’ for an enquiry. It will be a white-wash with a few sacrificial lambs. We can’t let that happen.