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07 July 2010 - Government approves amended Terms of Reference for Commission of Investigation into the banking sector and terms of reference for review of macroeconomic policy issues by Joint Oireachtas Committee on Finance and the Public Service

The Minister for Finance, Mr Brian Lenihan, T.D., has announced that the Government agreed, at its meeting on Tuesday 6 July, to amend the terms of reference for the Commission of Investigation, following the Minister’s meeting with the Joint Oireachtas Commute on Finance and the Public Service. The period to be examined by the Commission will now extend from 1 January 2003 to 15 January 2009 for the Commission’s examination of those banks that are covered by the Government’s Guarantee.

The Commission will now be in a position to examine matters relating to corporate governance and risk management in each of the banks covered by the Government’s guarantee up to the date of the Government’s decision to nationalise Anglo Irish Bank on 15 January 2009.

Establishment of Commission of Investigation

The Government has also approved the laying of the draft Government Order to establish a Commission of Investigation before the Houses of the Oireachtas. This draft Order contains the amended terms of reference. Following a vote on the draft Order by each House, the Order must be signed by the Taoiseach in order to establish the Commission. The Government expects to table a motion in each House to approve the draft Order before the end of the current Oireachtas session.

The Minister indicated, in his discussions with the Oireachtas Finance Committee, that he expected to be able to announce the appointment of an individual to head the Commission of Investigation shortly.

Referral of policy lessons on macroeconomic management to Oireachtas Finance Committee

The Government also approved at its meeting today to refer to the Joint Oireachtas Committee on Finance and the Public Service the policy lessons on macroeconomic management arising from the preliminary reports into the banking crisis. These are the key policy issues that Regling and Watson recommended be considered further:

  • the role of macroeconomic management and surveillance in securing the long-term sustainability of Ireland's economic performance and also in responding on a timely basis to risks and imbalances that may build-up in both the private and the public sectors of the economy, including external imbalances vis-à-vis other euro area members and the funding of any imbalances that might arise;
  • the role of fiscal policy in securing an appropriate alignment of the national business cycle with monetary conditions in the economy;
  • the requirement for the design and conduct of budgetary and taxation policies to take account of the cyclical nature of particular revenues as well as their temporary nature in certain circumstances in order to maintain an appropriate and effective tax base; and
  • the case for the establishment of new institutional structures to provide an independent validation of economic and fiscal projections as well as for the introduction of domestic medium-term fiscal rules.

The Government will table a motion of referral in both Houses of the Oireachtas under which the Committee will be asked to report back to the Dáil and Seanad by the end of October 2010.


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