Reckless banking caused our troubles

It was the banks who got us into the mess in the first place - but Nama won’t be able to fully rehabilitate them, writes Peter Matthews

19th September, 2009

Irish banks participated in the creation of a dangerous credit pyramid bubble which got under way in this country around 2002/2003. At that time, the ratios of loans to customer deposits at the Irish banks started to rise sharply.

This was not financially dangerous, it was far worse. It was professionally financially reckless.

Why? Because, as the regulator and every bank director should know and act within, the prudential principles of fractional reserve banking mean the...

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