Economist Censures Banks And Predicts Major Decline

A leading economist has launched a stinging attack on some of Ireland's banks during a shocking presentation at a financial conference.

A UCD economist, Morgan Kelly, raised attendee eyebrows with his predictions of an 80% fall in house prices, and a 10-year hike before Ireland recovers.

In his presentation entitled The Irish Property Bubble and its Consequences, Mr Kelly argued that the rate of an economies expansion is a strong indicator of the rate and duration of its collapse.

"It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it," he said.

Mr Kelly also attacked the ex-Anglo Irish Bank Chairman Seán FitzPatrick as well as the former financial regulator Patrick Neary, Minister for Finance Brian Lenihan and the Taoiseach.

However most worringly, Mr Kelly said that extending the Government guarantee to the Irish branches of the Anglo and Nationwide banks was "extraordinarily unwise", predicting the guarantees provded could be "called in the over the next 21 months".

This would make the government responsible for making good on the banks debts and costing the tax payer untold millions of euro.

To aid recovery, Mr Kelly said the Government should abolish stamp duty on property, compile proper price and quantity statistics and restore competitiveness through a public sector pay cut of 10%.

(DW/BMcC)