Research the Causes of Banking Crisis (Essay Sample)

Research the causes of Banking Crisis in Ireland and what the Irish government could have done to prevent the crisis to begin with.
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Ireland among the developed world experienced one of the most cataclysmic of financial crisis in 2008, when the world experienced the global financial crisis. Ireland vast banking system crisis was almost completely associated to property speculations and the unrestricted domestic housing bubble of the preceding decade. This paper set to analyze the conditions that resulted to the financial crisis. Taking into account the connections between the banking sector and the political systems and what the Iris government could have possibly done to prevent the crisis.
Following the crisis the Irish government commissioned a number of reports that provide a framework required to understand what led to the financial crisis. Patrick Honohan completed a report based on Banking crisis that was referred to as Honohan in March 2011, in the same period Patrik Nyberg completed a report "Misjudging Risk: Causes of The Systemic Banking Crisis in Ireland”; Klaus Regling and Max Watson compiled a report titled "A preliminary Report on The Source of Ireland’s Banking System "on behalf of Minister of Finance in 2010.These reports comprises several observations and justifications regarding the financial crisis.
The Nyberg Report recognizes systemic failure of customers in judging factual property values, failure of banks to recognize accurate credit value of customers, failure of the investors funding the banks in understanding the factual nature of risk involved in system of those banks, failure of an institutional regulators in understanding the dynamic market risk among the banks, failure by the government in supervision of the regulator, failure of the national parliament in identifying the intensifying problems (Nyberg, 2011).
The Regling & Watson report discovered that governance concerns were breached in at least one of the main financial institution, and uncontrolled lending, and fraudulent accounting operations in banks. Furthermore the report observed that the regulator should have recognized about these happenings were prudent putting auditing processes in place, consequently allotting accountability to the regulator.
The Honohan Report apportions accountability to intermediaries the likes of mortgage brokers and auditors, the reports criticizes the central bank in necessitating main protection to the national system against the rise of a banking crisis. The report claimed that the central bank "supervisory practice focused on verifying governance and risk management models rather than attempting an independent assessment of risk" Welfens, (2008). According to Welfens, Poor regulation was driven by a lack of skillful personnel, as result of poor wages.
The Irish government needed to address the benign regulatory administration that failed to live up to its responsibilities. There was a need to prevent the breakdown in internal com...