This time one year ago the proposal from Richard Bruton, then Finance spokesperson of Fine Gael, that we should look to wind down Anglo-Irish Bank in an orderly fashion over the medium term and adopt a “Good bank, Bad bank” solution for each of the main Irish banks was derided by many commentators in the press as failing to win support because of being too complicated to explain. Indeed, it was dismissed by former Fine Gael leader Alan Dukes as “very cumbersome, very doubtful of success and much less clear” than NAMA. While Dr. Garrett Fitzgerald in the Irish Times newspaper said the opposition must not oppose NAMA as any delay at all in taking action would be calamitous for the nation.
Twelve months on and this Good bank, Bad bank solution appears, in the government’s view and the view of the very man who expressed his opposition above, to be just the ticket for Anglo-Irish Bank. It is apparently no longer cumbersome, must surely have a high chance of success and is so crystal clear that we all must surely see a brighter tomorrow. This is for the most impaired bank of all, that is setting new records almost every quarter. Imagine what a Good bank, Bad bank solution might do for both the other Irish banks whose all encompassing state guarantee runs out this month and the taxpayer who is on the hook for all their debts.
With the passage of a year, it would seem from the ever increasing sums that need to be pumped into Anglo, combined with the ever larger discounts and scale of the transfers to NAMA, that it is the actions of the government that will prove calamitous. That we can all see now with the benefit of hindsight, but we did not lack for someone with foresight in this regard.
It would be simplistic to say you can never take too long to do the right thing, but the truth is that both these former leaders of Fine Gael have fallen hostage, as has the government and the civil service elite, to doing the bidding of the so-called fiscal wizards in the Irish banks whose decision making resulted their companies exposure to the particular problems of the Irish property bubble in the first place. They are all, at a minimum, guilty of listening for far too long to bad advice, or at worst wilful negligence of their duty to the nation.