DUBLIN (AP) — Irish lawmakers opened a fact-finding investigation Wednesday into the causes of Ireland's banking crisis, when a collapsing property market exposed reckless lending and forced the country to take an emergency international bailout.
Prime Minister Enda Kenny hopes to publish findings by November 2015. The televised hearings represent the first time that key players in the catastrophe — bankers, regulators, former ministers and property developers — will publicly explain their role.
"We will hear from those who were at the helm when Ireland ran aground, as well as from those who were in the engine room," said Ciaran Lynch, chairman of the 11-member, all-party Committee of Inquiry into the Banking Crisis.
He expressed hope that the effort would allow Ireland "to learn from previous mistakes and to ensure that, as far as is possible, we do not create the circumstances which would lead to a similar disaster."
The first witness, Finnish financial expert Peter Nyberg, author of a 2011 government-commissioned report analyzing the crisis titled "Misjudging Risk," said Ireland's leaders and finance chiefs made several years of mistakes by fueling a runaway property market amid weak regulation and no credible plans for a crash.
Ireland's highly leveraged banks faced ruin as a decade-long construction boom ground to a halt in 2008, and foreign creditors refused to lend new funds. The government nationalized most banks to forestall their collapse but Ireland's own borrowing costs soared, forcing the nation to take a European-International Monetary Fund loan rescue in 2010. Ireland resumed normal borrowing in late 2013 with only three of the original six banks still intact.
When a lawmaker asked Nyberg to assess "how bad was the Irish banking sector at misjudging risk," the Finn raised his eyebrows and offered a wry laugh.
"The Irish institutions," he said, "were pretty good at misjudging risk."