The Governor of the Central Bank, Patrick Honohan, has told the Oireachtas Finance Committee that he is approaching his investigation into the banking system under the assumption that there were failures in the financial regulatory system.
Professor Honohan, who is conducting one of the two preliminary Government inquiries into the banking system, said he was confident that it will be possible to establish a clear and comprehensive understanding of the factors that led to the banking crisis.
He said he believed there would be a limited number of questions that would require further probing by the Statutory Commission of Investigation.
He said some of the work was already being proceeded with and that there would be co-operation with the other preliminary inquiry to ensure no overlap between the two.
He said he would be reporting by the end of May this year.
Patrick Honohan said that the parameters of his preliminary inquiry into the banking system will extend to the end of September 2008. The original remit was to look at events up to the start of September 2008 but now it will take into account such issues as the bank guarantee scheme and considerations of what to do with Anglo Irish Bank.
Professor Honohan told Fine Gael's Richard Bruton he would have preferred if the events of September 2008 had been left for another study. He said there were a number of phases to be looked at. The first was the growth of the boom until the second half of 2007. The second was the phase of management and containment which ended with the establishment of the bank guarantee.
Patrick Honohan also told the Oireachtas Finance Committee that he believes NAMA will create the foundations for the recovery of banking.
Professor Honohan said there were a number of routes that could have been taken but the NAMA process had advantages.
He said he maintained his concerns that NAMA would end up overpaying for properties, but he said that this had become a 'less relevant issue' as the numbers had evolved.
