In an opinion piece published on Tuesday in The Financial Times, Lorenzo Bini Smaghi, a member of the board at the European Central Bank (ECB), wrote that Irish taxpayers should not complain about having to foot the bill to bail out their banks.
Reuters reported that Bini Smaghi laid out the case that since Irish taxpayers elected the officials who oversaw the Irish banking system and also benefited from bank expansion during the boom years before trouble hit, once domestic oversight proved to be insufficient, those taxpayers were rightly on the hook for the price of rescue. He went further, saying that domestic oversight of banks with subsidiaries in other countries was inadequate, and should be transferred to at least a euro zone level, or perhaps a European level.
As the Irish government pushes for a restructuring of its bailout package so that it is less burdensome to citizens, it has also raised the issue of bondholders accepting losses. The ECB has strenuously opposed this course, fearing that it will ignite a new crisis with debt contagion spreading throughout the euro zone.