Today, buried on the inner page of the Independent Business section there was an article stating that an Oireachtas committee found that the responsibility for the financial crisis in Ireland was largely down to regulators and ratings agencies (the same agencies who down-graded Irish debt in 09′).
Sadly, it didn’t make massive headlines, nor will it… If you could get a picture of Sean Fitz, or some scandal element to tag on then it would be everywhere, but the humble work of one of the few independent studies done on the matter, lacking sex-appeal & scandal will be widely ignored by the public, meaning everybody will still only see ‘banks’ as the source of the problem rather than as the conduit, when in fact the source of the problem was the gatekeeper, the person with their hand on the tap of the conduit, who allowed credit to flow too quickly for too long.
I had coffee with a well known economist last April and we spoke about this matter, he felt that it was all down to Anglo, my position was that while they were the catalyst, that other banks perhaps knew the game was flawed but played on anyway because they couldn’t just walk away from the table, and that the real responsibility for this rested with the referee (Regulator/Central Bank) for how the game was panning out, that the only person with the tools required to stop the madness were not the banks themselves (whose allegiance is to the shareholder not the nation), but the Central Bank and Regulator. The person I met for coffee has since left academia for other pursuits so I won’t get to bounce ideas off them much any more, but the point remains that people largely feel the banks were the sole culpable party in the meltdown and it simply isn’t true.
There is a great post on Irish Economy about this, started by Colm McCarthy, and points on both sides are well worth reading, some of my bias is clearly rebutted, some of it is clearly supported, in any case, it is worth clicking through for a read.