Jean-Claude Trichet, who headed the European Central Bank as the Irish economy headed for collapse in 2008, will not appear before a panel of the country’s lawmakers probing the crash. So they shall come to him.
Members of the parliamentary banking inquiry will be in the audience as Trichet gives a speech at 2:30 p.m. on Thursday in Dublin. While the former top central banker has said it’s not “legally possible” to appear before the inquiry itself, he’ll take questions from the politicians for 90 minutes after his address.
Amid demand for tickets, the Institute of International and European Affairs, which is organizing the event, has moved the hearing from its headquarters in the city center. It will instead take place at the Royal Hospital Kilmainham, a 17th century former soldiers’ retirement home that now hosts gala banquets and concerts by artists such as Leonard Cohen.
The event is a compromise designed to help the Irish figure out how they came to guarantee the debts of their banks in 2008, a move that helped push the nation into a international bailout two years later. Politicians want to know what role Trichet played in these events, including the decision to repay senior bank bond holders.
“The engagement with Trichet is an opportunity to fill in a number of missing pieces of the jigsaw that are presently missing,” Ciaran Lynch, a Labour Party lawmaker and chairman of the inquiry, said in a phone interview.
Brian Goggin, Bank of Ireland Plc’s chief executive between 2004 and 2009, told a banking inquiry hearing on Thursday that the day heading into the banking guarantee on Sept. 29 was “the worst of my life.”
With rival lender, Anglo Irish Bank Corp, on the cusp of default, the atmosphere in government buildings in Dublin “was incredibly stressful,” said Goggin, who was there at the time.
Mario Draghi, Trichet’s successor, told Lynch in a letter in December that the ECB wasn’t accountable to national parliaments and “doesn’t see itself in a position to participate” in the inquiry.
Instead, the former ECB president will use today’s event to describe the crash to the Irish inquiry. The International Monetary Fund described the country’s banking crisis as the costliest since the Great Depression.
The role of Trichet and the ECB in pressing Ireland into a bailout has been the subject of controversy since it occurred in December 2010. In a letter to Finance Minister Brian Lenihan weeks before, Trichet warned that the central bank would stop providing emergency loans to the nation’s banks if the government failed to agree to a rescue.
Weeks later, Justice Minister Dermot Ahern said “people from within the ECB” were “trying to bounce” the nation into a rescue program.
Lenihan’s successor, Michael Noonan, has said that the ECB in 2011 vetoed his plan to impose losses on senior bank bond holders in the former Anglo Irish Bank Corp., the lender that brought the nation to the brink of bankruptcy.
“One question has haunted the Irish psyche over the past number of years,” said Marian Harkan, an Irish member of the European parliament. “Just what was the role of Trichet and the ECB in the decision to pay - in full - unsecured and unguaranteed bondholders in insolvent Irish banks?”