Former Central Bank governor tells Galway audience the 2008 crash cost us €37 billion

Galway Daily news Galway family syndicate

Speaking at a conference at NUI Galway, former governor of the Central Bank Patrick Honohan said the 2008 banking crisis cost the Irish people €37 billion.

NUI Galway held a conference this week looking at how the country has changed in the 10 years since the economic collapse that led to years of austerity and recession.

According to Professor Honohan, further losses incurred by the recession included €29 billion to Irish shareholders, €28 billion for foreign shareholders in Irish businesses, and €14 billion to debt holders.

The Irish Times reports that Prof Honohan waned that the loss of tax revenue from US multinationals could cause the next big recession in Ireland.

Many multinational companies such as Google, Apple, and Intel keep their European headquarters in Ireland, which is where they are taxed on EU revenue.

The European Union ordered Ireland to collect €14 billion in back taxes from Apple that it says is owed, €1.5 billion of which was recently paid.

The Irish government is protesting the order, objecting to the accusation that the state gave Apple an illegal tax deal.

There has been speculation that Ireland could be seen as a less favourable site for multinationals if our corporate tax rules are forced change.

The conference chaired by President of NUIG Ciarán Ó hOgartaigh discussed how early warning systems meant to protect against another financial crisis are untested and vulnerable.

Former Chief Executive of the British Bankers Association Angela Knight said that many countries had adopted similar measures to avoid a repeat of 2008.

Because of this, she warned, any failure would have a wide ranging domino effect.

While the crash of 2008 originated in the U.S. with the collapse of Lehman Brothers, China was seen as the big risk factor for future crises.

Because China has spread so much money around investing in projects and infrastructure around the world, anything that causes a “foul up” of the Chinese economy would be felt far and wide.

Not every speaker at the conference came from an economic background.

Playwright Colin Murphy, who’s TV drama Bailout, based on the play of the same name, looks at how Ireland had to seek €64 billion from the EU and IMF after the crash.

He said there’s a dangerous trend of groupthink in boardrooms, and people should be on the lookout for buzzwords like “vulture fund”, “squeezed middle”, “snowflake”, “populist” or “neo-liberal”.