I'd rely on astrologer Fergus more than Central Bank chief
Central Bank governor John Hurley's claims that his organisation somehow warned about the current banking and economic crisis are nonsensical.
If he thinks that a few vaguely worded platitudes are enough to absolve him of any responsibility for our economic mess then he is very much mistaken.
Launching the Central Bank's 2008 annual report yesterday, governor -- as the Central Bank grandly styles its boss -- John Hurley claimed that it had warned about the dangers posed by the property bubble.
"We did identify the risk," he said.
Oh come off it. What Hurley is presumably referring to is the Central Bank's annual Financial Stability report. Published every year it used to warn in the vaguest possible terms that excessive property-based lending posed a potential risk to the health of the Irish banking system. Unfortunately these warnings were couched in the sort of on-the-one-hand, on-the-other-hand vagueness that is the stock-in-trade of astrologers.
Read today these "warnings" are capable of a multitude of interpretations.
Interestingly, while the annual Financial Stability Report used to be published as regularly as clockwork in November of every year we are still waiting for the 2008 edition. Explanations on the back of a €100 note please!
However, even if the Financial Stability Report was crystal clear in its meaning that still doesn't get Hurley and the Central Bank off the hook.
Why, if they were warning us of the coming crisis, did Hurley and his colleagues do absolutely nothing about it?
Instead they idly sat by and watched the biggest asset price bubble in Irish economic history inflate to utterly unsustainable proportions before inevitably bursting.
Tens, possibly hundreds, of thousands of homeowners, small business and other borrowers are now paying for the Central Bank's failure to do its job properly.
The number of repossessions is running at record levels and even homeowners who are managing to keep up their mortgage repayments find themselves stuck in negative equity where the value of their home is less than the amount which they owe on their loan.
Small businesses are also being crucified by the banking crisis with overdrafts being slashed and new loans virtually impossible to come by.
This is one of the major reasons behind the dramatic rise in unemployment, up almost 200,000 over the past 12 months.
But Hurley's responsibility for the current mess goes even deeper than that. By the late 1990s it was clear that the Irish financial regulatory system was not fit for purpose.
The 1999 McDowell report recommended that the task of financial regulation be taken away from the Central Bank and entrusted to a new, independent organisation.
The Central Bank, aided and abetted by the Department of Finance, of which Hurley was boss before being appointed governor in 2002, was having none of it and launched a furious, and ultimately successful, lobbying operation to secure control of the new Financial Regulator.
The result was a complete and utter disaster.
And what does Hurley have to say about his role in foisting the Financial Regulator on the Irish financial system? Once again it seems to be a case of nothing to do with me Gov.
He tells us that "behaviour changed" and that the "international regulatory environment was clearly found wanting".
Now Hurley is forecasting that, after shrinking by 8 per cent this year, the economy will contract by a further 3 per cent next year.
However, the good news, according to Hurley at any rate, is that economic recovery will begin in 2011.
I don't know about you folks but, given Hurley's previous record, I'd be more inclined to rely on the predictions of the Herald astrologer, Fergus Gibson.