Regling: Ireland was a country 'where no one was really in charge'

Regling: Ireland was a country 'where no one was really in charge'

Klaus Regling, a co-author of the preliminary report into the banking crisis, has told the Banking Inquiry this morning that Ireland was “a country where it seemed no one was really in charge” to prevent the property bubble which eventually burst. 

Regling told the committee that a combination of “global and domestic factors” made Ireland one of the worst-affected countries during the global financial crisis.
He criticised Ireland’s cultural attitude to property, which he said became a “national obsession”.
That obsession “developed into a blind spot that was dangerous in a country that had never experienced a property crash,” he said. 
But, he added, the cultural issues were by no means the sole cause for the crash.
Regling said that at the time, banks were enjoying “unprecedented access to foreign funds” and that, combined with a clear lack of budgetary discipline, helped lead to the crash.
Regling criticised the “disastrously weak” governance in the banking sector.
A softer landing would have been possible, he said, if the government had initiated fiscal policies that dampened, rather than stimulated the economy. 
Tighter loan-to-value ratios would also have helped.
Statistical tools that are usually relied upon also failed to identify underlying problems.
Regling said that the IMF was not strong enough in its criticisms of the government’s policies and that the Central Bank also failed to issue sufficiently strong warnings on macro-financial policies. 

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