THE NYBERG REPORT has said today that the Irish banking crisis was not caused by international developments “though they helped precipitate it”.

While it names no names, the report concludes that the scale of the crisis was “the result of domestic Irish decisions and actions”.

It points to the high-risk lending practices of banks giving out “shockingly larger loans for commercial property deals”, the willingness of other banks (“the herd”) to follow Anglo-Irish Bank’s high-rolling ways, the dissemination of the myth of the “soft landing” for the property market by public authorities (“the enablers”) and the public itself for believing it.

Most of all, Nyberg asks the question that many have now asked before: Why did no-one say stop?

We might have heard the admonishments before – but somehow it’s all the more stark when illustrated in the graphs in today’s Nyberg Report of  banking activity pre, during and post ‘the bubble’.

How the amounts loaned out by the banks covered by the State guarantee grew to dwarf the amount they had on deposit:

How the amount they loaned to domestic clients shot up from €94bn in 2002 to €262bn in 2008:

The growth of risky construction and property sector loans:

How the value of those publicly-listed banks plummeted from July 2007 up to the bank guarantee in September 2008:

How the amount of property and business loans came to around the same as half of our national GDP by 2008:

How the banks did not cover themselves for defaults on those loans – in fact, they were less prepared for the loans to go bad, the more money they loaned out:

The funding gap between the money in deposits in banks eventually covered by the State guarantee and the money on their loan books:

The enormous increase in buy-to-let mortgages taken out in the run up to 2006:

How the pay packets of bank CEOs got fatter and fatter up to 2007 (and beyond for INBS):

And finally, a little pan-European context for the lending spree in Ireland:

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