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Irish Banking Inquiry: Ex-PM Brian Cowen apologises for 'hardship' during crisis Irish Banking Inquiry: Ex-PM Brian Cowen apologises for 'hardship' during crisis
(about 1 hour later)
The former Irish Prime Minister Brian Cowen has apologised for 'hardship and distress" caused by the Irish financial crisis which began during his tenure. The former Irish Prime Minister Brian Cowen has apologised for "hardship and distress" caused by the Irish financial crisis, which began during his tenure.
He told the Irish Banking Inquiry his government's austerity policies were a "necessary" response and that they had tried to "mitigate the human cost".He told the Irish Banking Inquiry his government's austerity policies were a "necessary" response and that they had tried to "mitigate the human cost".
The parliamentary inquiry is examining the causes of the 2008 crisis.The parliamentary inquiry is examining the causes of the 2008 crisis.
Mr Cowen was taoiseach (Irish prime minister) at the time the state needed an international bailout. Mr Cowen was prime minister (taoiseach) at the time the state needed an international bailout.
He was also its finance minister in the preceding years.He was also its finance minister in the preceding years.
Mr Cowen is giving a robust and confident defence of his time as finance minister. 'First world infrastructure'
He said his budgets were about improving public services and giving Ireland "first world infrastructure". Mr Cowen has also given a combative defence of his performance as finance minister in the years before the crash.
He defended property tax incentives as part of that but said that with hindsight they could have been reviewed earlier. He said his expansionary budgets in the preceding years were about improving public services and providing the Republic of Ireland with a "first world infrastructure".
'Plausible' The former Fianna Fáil party leader defended property tax incentives as part of that, but said that with hindsight they could have been reviewed earlier.
He said "no government in the democratic world" was budgeting for the possibility of the biggest financial crisis since the 1920s. He added that "no government in the democratic world" was budgeting for the possibility of the biggest financial crisis since the 1920s.
Mr Cowen said his policies as finance minister were "plausible" and "backed by international peer review." He said his policies as finance minister were "plausible" and "backed by international peer review".
He was also critical of the performance of the Irish Central Bank and financial regulator saying he should have been "more doubting and more questioning". Mr Cowen described as "simply not true" the allegation that he was beholden to property market interests.
'Reckless lending'
He outlined a series of measures he took that he said were an attempt to cool the property boom.
Mr Cowen blamed "reckless lending" and a "bonus culture" among the country's banks as a major cause of the crisis.
He was also critical of the performance of the Republic of Ireland's financial regulator, saying he should have been "more doubting and more questioning".
He said that the system of regulation in the Republic of Ireland and elsewhere had "failed completely".
Earlier, Mr Cowen said the government he led dealt with the crisis to the best of its abilities.Earlier, Mr Cowen said the government he led dealt with the crisis to the best of its abilities.
He said that the system of financial regulation in Ireland and elsewhere had "failed completely." He also defended his government's decision to guarantee the liabilities of Irish banks in September 2008, a move that ultimately led to the international bailout in 2010.
Defending his time as finance minister, he said it was "simply not true" that he was beholden to property market interests. 'On our own'
He outlined a series of measures he took which he said were an attempt to cool the property boom. He said the government had "one shot" in the most acute phase of the crisis, and the guarantee was the "most decisive" move it could take.
Bank guarantee He added that it was "clear we we were on our own" on the night of the guarantee and that the wrong decision could have set the Republic of Ireland back by 25 years.
He also defended his government's decision to guarantee the liabilities of Irish banks in September 2008, a move which ultimately led to the international bailout in 2010. Much of the inquiry to date has focused on the events around the guarantee.
He said the government had "one shot" in the most acute phase of the crisis and the guarantee was the "most decisive" move it could take.
He added that it was "clear we we were on our own" on the night of guarantee and that the wrong decision could have set Ireland back by 25 years.
His written submission to the inquiry included a robust defence of his economic policies.
Much of the inquiry to date has focused on the events of 29 September 2008, when the Irish government agreed to guarantee the liabilities of the country's banks.
That decision effectively meant the Irish state and its citizens would have to cover the banks' losses.That decision effectively meant the Irish state and its citizens would have to cover the banks' losses.
Those losses ballooned to more than 60bn euro (£42.5bn), forcing the government to seek help from the European Union and International Monetary Fund (IMF).Those losses ballooned to more than 60bn euro (£42.5bn), forcing the government to seek help from the European Union and International Monetary Fund (IMF).
Deep recession Mr Cowen became prime minister and leader of the Fianna Fáil party in 2008, shortly before the global financial crisis began.
Mr Cowen became taoiseach and leader of the Fianna Fáil party in 2008, shortly before the global financial crisis began. In the Republic of Ireland, it led to a deep recession, high unemployment and a series of austerity budgets.
In Ireland, it led to a deep recession, high unemployment and a series of austerity budgets.
Mr Cowen resigned shortly before the 2011 election in which his party's vote fell by 50%.Mr Cowen resigned shortly before the 2011 election in which his party's vote fell by 50%.
In a speech in 2012, he admitted his government should have increased taxes and cut spending during the boom years.
He also said that regulation of the Irish banking sector had been "complacent and permissive".