Cathy Herbert, Derek Quinlan, Brendan McDonagh & Michael Somers to appear before Banking Inquiry

08/07/2015

The Oireachtas Banking Inquiry will continue its hearings when it will meet with Cathy Herbert, Derek Quinlan, Brendan McDonagh and Michael Somers tomorrow, Thursday, 9th July.

The schedule for the meeting in Committee Room 1, Leinster House is:

Session A: 9.30 a.m.
Cathy Herbert, former Special Advisor to Minister Brian Lenihan

Session B: 11.30 a.m.
Derek Quinlan, former Executive Chairman and Founder of Quinlan Private

Session C: 2.30 p.m.
Brendan McDonagh, former Director of Finance, Technology and Risk, National Treasury Management Agency

Session D: 4.30 p.m.
Michael Somers, former Chief Executive, National Treasury Management Agency

Chairman Ciaran Lynch TD said: “At our first session tomorrow morning we will hear from Ms. Cathy Herbert, former Special Advisor to Minister Brian Lenihan. Cathy Herbert was first appointed as special advisor by the late Brian Lenihan in January 2006 when he became Minister for Children and she continued as his advisor throughout his ministerial career. She had previously worked as special advisor to the former Minister Dr James McDaid. Before that, Ms Herbert worked as a journalist with RTE.

“Among the lines of inquiry the Committee will consider with Cathy Herbert are: the role of advisors in analysing the crisis, including crisis management options; the appropriateness of the bank guarantee decision; the decision to nationalise Anglo in 2009 and a review of the alternatives available and/or considered; the decision to recapitalise Anglo, AIB, Bank of Ireland, EBS, Permanent TSB and the alternatives available and/or considered; and the Credit Institutions Stabilisation Act and the effectiveness of the actions to merge AIB and EBS, Anglo and INBS and deposit transfers

“She will also be questioned on the EU/ IMF/ECB programme of assistance; the role and influence of the ECB; the appropriateness of the expert advice sought, quality of analysis of the advice and how effectively this advice was used; the impact of the reliance placed upon information and reporting from statutory auditors of the banks; and the appropriateness of the relationships between Government, the Oireachtas, the banking sector and the property sector.

“At the following session we will hear from Derek Quinlan, former Executive Chairman and Founder of Quinlan Private. This is the first of several sessions in which the Inquiry will focus on the relationships between the property development companies and their principal financial institutions.

“Derek Quinlan founded the business which was to become known as Quinlan Private in May1989. He has been involved in significant investment and development in the United Kingdom, Ireland and several other European locations over a 25-year period. He acted as both principal and advisor in some of the most significant real estate investments of the last fourteen years. Mr Quinlan retired as Chairman and Founding Partner of Quinlan Private in May 2009.

“He is being directed to attend the Inquiry to provide an overview of the relationship between his company and its principal financial institutions, referring, in particular, to the processes behind loan applications, monitoring and oversight of loans by those institutions, a description and assessment of how multi-bank lending in respect of his company was managed and a description and assessment of the business models supporting the expansion of his business in the years leading up to the banking crisis. The Inquiry is also interested in finding out at first hand the impact of the crash on the property sector.

“At the afternoon’s sessions, we will focus on the role of the National Treasury Management Agency during the Crisis. At our first session this afternoon, we will hear from Brendan McDonagh, former Director of Finance, Technology & Risk at the NTMA.

“Brendan McDonagh worked at the NTMA from 1994 to 2009, where he was Financial Controller and later Director of Finance, Technology & Risk. He is currently Chief Executive Officer of the NTMA. He will be asked to give evidence on a number of lines of inquiry relating to his role as the Finance Director of the NTMA, including: the appropriateness of the bank guarantee decision; the adequacy of the assessment and communication of both solvency and liquidity risks in the banking institutions and sector; the appropriateness of the expert advice sought, quality of analysis of the advice and how effectively this advice was used; and the appropriateness of the relationships between Government, the Oireachtas, the banking sector and the property sector.

“At our final session we will continue on the role of the NTMA during the Crisis, and will hear from Dr Michael Somers, former Chief Executive of the agency. Michael Somers was CEO of NTMA for 19 years, from December 1990 until his retirement in December, 2009. Prior to this he was Secretary General, National Debt Management in the Department of Finance and Secretary General at the Department of Defence.

“Among the lines of inquiry the Committee will address with Mr Somers are: the adequacy of the Domestic Standing Group process, including a consideration of the bank resolution legislation; the effectiveness of the CBI liquidity group under the Joint Financial Stability Committee; the role of advisors in analysing the crisis, including crisis management options; the liquidity versus solvency debate; an appraisal of the conditions prior to increasing the Deposit Guarantee Scheme; the appropriateness of the bank guarantee decision; and the effectiveness of reviews of banks’ loan books and capital adequacy.

“Other areas of interest are: the decision to nationalise Anglo in 2009 and a review of the alternatives available and/or considered; the establishment, operation and effectiveness of NAMA; the decision to recapitalise Anglo, AIB, Bank of Ireland, EBS, Permanent TSB and the alternatives available and/or considered; the cost of the crisis and sharing of the impact; the role and influence of the ECB; the options for burden sharing during the period 2008-2013; and the role of the euro zone and international partners in this decision.

“Mr Somers will also be questioned on the appropriateness of the macro-economic and prudential policy; the nature and effectiveness of the operational implementation of the macro-economic and prudential policy; the appropriateness of the expert advice sought, quality of analysis of the advice and how effectively this advice was used; an analysis and consideration of the response to contrarian views, both internal and external; the appropriateness of the advice from the Department of Finance to Government and the use thereof by Government; the appropriateness of the relationships between Government, the Oireachtas, the banking sector and the property sector; and the adequacy and impact of international organisations’ oversight on banking regulation and supervision activity.”

Further information on the Oireachtas Banking Inquiry can be accessed on this website. Full committee proceedings will also be webcast live on this website, while Oireachtas TV will broadcast proceedings from 9.30am-11.15am.

Committee proceedings can also be viewed on the move, through the Houses of the Oireachtas Smartphone App, available for Apple and Android devices.

All media enquiries in relation to the Oireachtas Banking Inquiry should be addressed to:

Ciaran Brennan,
Houses of the Oireachtas,
Communications Unit,
Leinster House,
Dublin 2

P: +3531 618 3903
M: 086-0496518
F: +3531 618 4551

All general enquiries should be directed to the Committee Secretariat.

e. contactbankinquiry@oireachtas.ie
t. +353 1 618 3651

Committee Membership

Deputies

Ciarán Lynch (Chairman)
Pearse Doherty
Joe Higgins
Michael McGrath
Eoghan Murphy
Kieran O’Donnell
John Paul Phelan

Senators

Sean D Barrett
Michael D’Arcy
Marc MacSharry
Susan O’Keeffe