The Bankers: How the Banks Brought Ireland to Its Knees Review

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(More customer reviews)Shane Ross, a Senator and also the business editor of Ireland's Sunday Independent, gives us the inside story of how Ireland's ruling class wrecked its economy. Property developers, regulators, auditors, Ireland's Central Bank, politicians, stockbrokers, banks' in-house economists, estate agents and auctioneers, really were `all in it together'.
British firms too exploited the Irish. Anglo's blind auditors Ernst & Young got 2.2 million euros in fees in 2008. PricewaterhouseCoopers audited the Bank of Ireland in 2001, for a fee of 15.4 million euros.
When Ireland adopted the euro, it created an inflationary bubble. The capitalist class put no limits on banks' lending to property, inflating this bubble, and put no limits on bankers' pay and bonuses. The Bank of Ireland and the Allied Irish Bank competed in a lending frenzy: "The two big banks ran their own rackets." As Ross writes, "The black economy was entrenched in the financial system and underpinned the mortgage market."
Before the 2002 election, Fianna Fáil claimed, "no cutbacks are being planned." After the election it at once imposed what the Economist called `the country's toughest Budget in years, raising taxes, cutting spending in real terms'. As a result the Green Party, Fianna Fáil's partners in government, was crushed in 2009's elections (LibDems, note well).
Professor Morgan Kelly warned in The Irish Times of 28 December 2006 that housing could go into freefall, "There is an iron law of house prices. The more house prices rise relative to income and rents, the more they subsequently fall."
The government fixed a 440 billion euro bailout, which gave the bankers all the taxpayers' money they wanted, with no obligation to lend. It underwrote all the bankers' past and future dealings, and again put no limits on their pay and bonuses. Taxes were raised, to pay the bankers; services were cut, to pay the bankers; more loans were raised, to pay the bankers.
The government also endorsed the bankers' lie that Ireland was the victim of the world's problems, which let the bankers off the hook. Ross sums up, "The mess had been created by builders and bankers. The people were paying the bill."

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Two years ago, the Irish economy was still booming; now, it faces an unprecedented crisis. There is, of course, an international context for these developments, but the Irish story - a story of extraordinary collusion between banks, regulators and the government - is perhaps unique in its tawdriness.This is the story Shane Ross - journalist, independent Senator, and long-time champion of citizens against misbehaving corporations - tells in The Bankers, going behind the scenes and the headlines to explain what happened, how it happened, and who made it happen. They're all here: Sean Fitzpatrick and the other bank bosses; Patrick Neary and the other members of Ireland's failed regulatory apparatus; the property developers, who dominated the banks' lending to a ruinous degree; and the politicians, who inflated the property bubble and haveallowed the banks to dictate the terms of their bailout to an astonishing degree. Shane Ross knows the stories of these people and what they got up to better than anyone, and in The Bankers he makes sense of a scandal that will haunt Ireland for years to come.