After causing banking crash FF want to take control of banking regulation – Harris

The Minister of State at the Department of Finance, Simon Harris TD has strongly criticised Fianna Fáil proposals to enable the Central Bank to interfere directly with the banks.

Minister Harris said: ‘In a development that will greatly concern every Irish citizen who lived through the Fianna Fáil banking crash and subsequent bailout, Fianna Fáil have given their clearest indication yet that they want to take control of banking regulation’.

“Today the Fianna Fáil spokespeople on Finance and Housing confirmed that they would interfere in the running of the Central Bank and the commercial banks. By intervening in mortgage policies of commercial banks, Fianna Fail would scare off new banks from entering the Irish market. This would harm all Irish consumers and our economy.

“Former Governor of the Central Bank, Patrick Honohan made the following statement at an Oireachtas Committee last year when asked about similar proposals: ‘Why would intervention be bad for the country as a whole in the medium term? The two notable reasons are that it would have a stultifying effect on bank efficiency and a chilling effect on the entry of other banks’.

“Earlier in the campaign Fianna Fáil’s Darragh O’Brien had questioned the authority of the Central Bank and dismissed the authority of the Governor of the Central Bank, saying Philip Lane ‘isn’t the oracle’. During their recent Ard Fheis, Fianna Fáil committed to ‘immediately introducing legislation’ to take the power of regulation of Ireland’s banks back into the hands of a Fianna Fáil Minister for Finance.

“One of the biggest threats to keeping the recovery going is a Fianna Fáil Minister for Finance in charge of banking regulation again. Their record of poor regulatory oversight and their links with bankers and property developers was one of the root causes of the banking crash and subsequent bailout of our country.

“It is clear from statements from the previous and current Governor of the Central Bank that Fianna Fáil policy would have a ‘chilling effect’ on banking competition which would ultimately hurt Irish consumers and mortgage holders. It is yet another reason why they cannot be trusted with the banking system and the economy.”

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