Time for heads to roll?

Per Thomson Reuters report,

"Outflows of funds from Ireland in recent weeks have not reached a critical level despite market stresses, Finance Minister Brian Lenihan said on Tuesday. 'There has been stresses in the markets in recent weeks,' Lenihan said. 'There has been some outflow of funds -- it has not reached a critical level,' he told public broadcaster RTE, declining to give further details.

Lenihan told Reuters in a separate interview that Ireland's financial system has been under major stress since the state nationalised Anglo Irish Bank in January, but the country's other lenders were not afflicted by the same sort of corporate governance issues."

Apparently, tomorrow's papers are carrying Lenihan's claim that banks executives are trying to shift blame for the crisis on the Government. Well, if true, I am with the executives on this one:

1. The markets were fully aware of the problems with the Anglo Irish Bank's balance sheet and issues at other banks well before the middle of the Summer 2008 - hence massive downgrades in the share prices and large short-selling activity in banks shares;
2. This should have alerted both the Financial Regulator and the Government to the issue at hand. In fact, it was the CBFSAI that banned short-selling and conducted an 'investigation' into short traders dealing in Anglo Irish shares. Doing so, the Government has in effect caused the fire-sale closure of Sean Quinn's CFD positions and necessitated a loan-for-shares deal.
   
3. Before September 30 guarantee the Cabinet had at least two different proposals for dealing with the crisis, both requiring some time to formulate and clear through the legal eagles, implying the Government was aware of the problem beforehand;
4. The Government knew of the problems on the fiscal side at least since July 2008 - Minister Lenihan himself admitted so much, yet it failed to take any significant action to bring the matter under control - to date;
5. The Government was fully aware of the rate of deterioration in Irish property markets and the economy or was simply deaf and blind to the warnings and analysts' estimates;
6. Minister Lenihan was in charge of Finance at the time when his subordinates (including CBFSAI) had in their possession full information concerning Mr Fitzpatrick's loans and his own staff (at the FR and potentially at DofF) nodded through the controversial loans-for-shares deal;
7. FR and CBFSAI have cleared the extraordinary support scheme between IL&P and Anglo;
8. Mr Lenihan's own department last week confirmed the story that some €10bn in 'funds or deposits' moved out of Ireland in one week - if such a flight not catastrophic, what is?
9. Mr Lenihan should be fully aware that the nation's banking system was 'under major stress' well before this January and in fact since mid 2008, yet he still insists on making silly statements that no person with an ounce of markets exposure can take seriously...

The list can go on and on, but the core of this is pretty clear: Brian, Brian and Mary either knew all or most of this or are guilty of gross incompetence or both. Take your pick. My personal belief is that Brian Cowen is largely informed about the state of affairs, but remain politicaly partisan and unwilling to make any coherent policy decisions. Minister Lenihan is an unfortunate party to Mr Cowen's inability to act. When it comes to Ms Coughlan - she is simply not fit for the job. But none of this excuses the state of affairs at the helm of Ireland Inc.

Either way, if heads were to roll, we should start from the top of the Government and then move onto CBFSAI and DofF. Enough covering up this charade - the buck stops somewhere and the rotten leadership is the best place for it to rest!