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Ireland opens banking inquiry after bankers escape jail
April 30, 2014 / 2:16 PM / 4 years ago

Ireland opens banking inquiry after bankers escape jail

* First public inquiry into collapse follows banker trial

* No one jailed in landmark Anglo Irish Bank case

* Judge said regulator led bankers to “illegality”

By Neil Maidment

DUBLIN, April 30 (Reuters) - The Irish government ordered an immediate public inquiry into the 2008 collapse of the country’s banking sector on Wednesday, a day after a criminal trial against executives of the bank at the heart of the crisis ended without any jail sentences.

The collapse and nationalisation of some of Ireland’s largest banks forced the government to accept an 85 billion-euro ($115 billion) international bailout and voters have expressed frustration at how few people have been held accountable.

Two senior executives at Anglo Irish Bank were found guilty earlier this month of illegal lending and providing unlawful assistance to investors, but on Wednesday a judge decided not to impose any jail sentences.

Instead, Judge Martin Nolan at Dublin’s Circuit Criminal Court said the pair were “led into error and illegality” by the country’s financial regulator and referred them to the probation office for possible community service.

“There is a compelling demand from the public to know what happened,” Public Expenditure minister Brendan Howlin told journalists. “And I think there are a lot of unanswered questions that emerged from the court proceedings that should be answered by those directly responsible.”

The government said in a statement it hoped a motion to establish the inquiry would be put to parliament next Tuesday.

Anglo Irish became synonymous with the casino-style lending practices that drove the “Celtic Tiger” boom and subsequent bust, but the country’s two largest lenders, Allied Irish Banks and Bank of Ireland, also required multi-billion-euro bailouts.

Public outrage in Ireland, where public-sector salaries have been cut and taxes hiked as a direct result of the crisis, intensified after a newspaper last year published transcripts of taped telephone conversations between executives of Anglo Irish Bank.

In one tape, an executive was asked how he came up with the size of a 7 billion-euro rescue request and said he had “picked it out of my arse.” (Additional reporting by Conor Humphries; Editing by Larry King)

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