Today I finally read through the Nyberg Report on the cause of the banking crisis in Ireland. The report was released recently but doesn’t really contain anything that someone with a brain and a heartbeat didn’t already know. Hence I will not rehash the content as there are legions in Ireland already doing so.
Playing the blame game seems to be de riguer at the moment, we’re all frantically pointing the finger in a desperate attempt to assign blame to some faceless party for the mess we are in. It’s the bankers, the government, the developers, the regulator, the media, foreign banks, the EU, the ECB, Lehman Brothers who are at fault. However what you rarely will hear is that we the people living in Ireland (or at least the majority) are just as much at fault. Yes we had banks with unhealthy lending practices and we had a government who not only failed to prevent a crisis but who actually encouraged unsound financial practices but we also had people buying 1, 2, 3, 4 and more houses at inflated prices, we had people taking out 2nd & 3rd mortgages on the same property, we had the frenzy of buying a new car every time the year changed. We had people from lower & middle-income classes taking multiple foreign holidays. We had designer kitchens, designer luggage, designer clothing and designer weddings. We even had designer pets and designer pet accessories. Most of us basically went mad.
Allthis was paid for with borrowed money. Not our own borrowed money but money that our banks borrowed abroad without actually applying logic to the feasibility of ever being able to repay it. And when the economic shit hit the financial fan we were way up the proverbial creek with not a paddle in sight.
However while reading the Nyberg report there was a paragraph on page 116 that really put the frighteners up me;
The result, as shown by the crisis itself, was that no effective brake on risk-taking existed for years.
It does not appear wholly unfair to propose that this is what may happen also in the future if
and when another new financial or banking paradigm appears. Many of the very reforms that
recently have been undertaken, at short notice, to shore up the functioning of the present
financial system could turn out, once again, to be ineffective.
And there you go. In spite of all the talking, report, and the endless stream of Primetime, Frontline, Vincent Browne broadcasts we have learned nothing….