A COMMITTEE of the Oireachtas cannot be a court of judgment on private individuals and cannot find on matters of fact, Minister for Finance Brian Lenihan insisted in the Dáil as he rejected the Opposition’s call for an Oireachtas committee inquiry into the banking crisis.

The Government rejected the Labour Party Private Members’ motion for a Dirt-style Oireachtas committee inquiry by 78 votes to 73. The party had also called for legislation to be introduced based on a Powers of Inquiry Bill prepared by the Labour Party.

During the debate on a banking inquiry, Mr Lenihan stressed that for “an investigation to proceed speedily and cost-effectively, it must be able to conduct its business in private. The only other alternative that allows us to conclusively investigate a matter is a tribunal of inquiry” which would be too costly and protracted.

He rejected assertions by Labour finance spokeswoman Joan Burton questioning the legality of the governor of the Central Bank carrying out an investigation into that organisation.

The Minister insisted Prof Patrick Honohan “is particularly well placed to carry out this inquiry. He has full access to the papers and information within the Central Bank and is therefore in a better position than an independent person outside the Central Bank to head up this inquiry.”

There was “no prohibition on the governor giving his analysis of the performance of functions within the regulatory system”.

Labour leader Eamon Gilmore said that, contrary to the spin that the Taoiseach and Minister for Finance were putting abroad, his party had never proposed a tribunal to investigate the banking crisis.

He said it was the third time since the second World War, and the second time in a generation, that the State faced a profound economic crisis.

“In the 1950s and again in the 1980s, we could, at least in part, point to the historic underdevelopment of the economy as contributing to those earlier crises,” he added.

“This time, we have no such defence. This time, we are confronted by a massive failure to govern and manage an economy that had finally left the tag of ‘economic underdog’ behind.” It was a failure which went well beyond the normal assessment of government incompetence, said Mr Gilmore.

“What we are looking at is a fundamental and profound failure that has had dire implications for hundreds of thousands of people,” he added.

“It has imposed extraordinary costs on the State and the people of Ireland.” He continued: “How did this happen ? How was it allowed to happen? What went wrong and how do we ensure that it doesn’t happen again?”

These were “questions that have to be asked and answered in public.”