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Irish banking collapse inquiry criticises ECB
[DUBLIN] An official inquiry into Ireland's 2008-10 banking crisis on Wednesday found that the European Central Bank's role in the aftermath left taxpayers shouldering an "inappropriate" share of the burden.
The 460-page report by a committee of Irish politicians found that before the collapse, Irish banks started taking a more aggressive approach to lending and that financial regulators failed to spot the risks.
After a bailout was announced, the inquiry said the ECB threatened the Irish government in March 2011 with the withdrawal of emergency support for banks if losses were imposed on senior bondholders, or top-level investors.
"The ECB position in November 2010 and March 2011 on imposing losses on senior bondholders contributed to the inappropriate placing of significant banking debts on the Irish citizen," the report said.
Ireland's economy, nicknamed the Celtic Tiger, crashed in 2008 after a decade of near double-digit growth fuelled by cheap credit and booming construction and property sectors.
This led to the nationalisation of Anglo Irish Bank in 2009 and Ireland receiving an 85 billion euro (S$132.6 billion) European bailout in 2010.
After enduring deep austerity cuts, it emerged from the bailout in 2013.
Ireland's economy is now growing again at the fastest rate in the European Union. Officials predict the overall gross domestic product (GDP) growth figure for 2015 will be around seven percent.
The inquiry, set up in 2014, heard from 128 witnesses and concluded its public hearings in July last year.
An editorial in the Irish Times criticised legal restrictions which meant that some background documentation was not made public.
"The inquiry has helped us to understand a bit more - the pity is that a proper public inquiry did not happen much sooner and under a legal framework which paid more than lip service to the public's right to know," it concluded.