Two ghosts of Christmas past made a shock appearance in the dungeons of Leinster House just before the recess. There they were, apparitions from former glory days, hovering above the Dail's Finance Committee. The Bank of Ireland's 'public interest' directors answered the summons. TDs queued up, curious to inspect these strange creatures from another world. Joe Walsh and Tom Considine had floated down from a higher sphere. They returned to haunt the scene of long-forgotten battles.

Once upon a time the two visiting spirits were real. Joe Walsh was once a real Fianna Fail Minister for Agriculture. Today he is a relic, a legacy director of the troubled Bank of Ireland. Joe is the chairman of the bank's remuneration cabal, the head man on the committee which makes sure that chief executive Richie Boucher gets paid his €620,000 a year, plus perks. Joe dwells in the wonder world of bankers, a planet where insolvent companies still pay bloated salaries.

Tom Considine was once a real head of the department of finance. He was even a member of the board of the regulator when "light touch" regulation was all the rage. Such useful experience somehow justified his appointment as a public interest director. He too has settled into the weird world of banking. Like Walsh, already a highly rewarded State pensioner, he has added €90,000 a year as a public interest director. As a member of the bank's nomination committee he even approved the appointment of another banking insider, Archie Kane, as the latest Governor of the Bank of Ireland.

The two ghosts are today as happy as pigs in the proverbial. They are accountable to no one. They have never even met the Minister for Finance in their capacities as public interest directors. They do not stand for democratic re-election as they are public interest directors! They define their own jobs. And now that they have reached this seventh heaven, they do not rock the celestial boat.

Never did two men look less comfortable with their surroundings. Descending to Earth was patent purgatory.

The gulf between the spirits and reality showed. Walsh left TDs open-mouthed gasping for breath for entire minutes, as he dismissed the Bank of Ireland's collapse as part of a global problem caused by Lehman Brothers. None had heard that canard since 2008. The two struggled to explain to independent TD Stephen Donnelly whether there would be debt write-off under the new Personal Insolvency Bill.

The exasperated chairman, Labour TD Ciaran Lynch, compared their refusal to give worthwhile answers with the arrogant attitude of their chief executive Richie Boucher in front of his committee a few weeks earlier.

If anyone was looking for evidence that the old banking regime is still in situ, here was proof. The two men, supposedly chosen specially to protect the public interest, did not, in my view, even bother to disguise their contempt for their parliament.

The banking bubble lives on, almost unpricked.

What was so wondrous was not just the attitude of the two spooks. Far worse is the new Government's indulgence of their very existence. Fine Gael and Labour should have exorcised these ghosts, inventions of Fianna Fail, 18 months ago. Especially as Walsh and Considine are not alone. Other banks paraded similar spirits in the same dungeons in Christmas week, including former cabinet ministers Ray MacSharry and Dick Spring, while plutocrats of the civil service – the NTMA's ex-boss Michael Somers and former secretary of the Department of Tourism Margaret Hayes – took the public interest directors' podium.

Why does the Government still tolerate these absurd creations?

Because the banking/government relationship has never changed. The Government is captured, the bankers dictate the rules. The bankers' setback in 2008 was temporary. They are fast re-establishing the old ethos. And the old guard.

Today, bankers, ministers and top civil servants once again work to an identical agenda. They see the restoration of the cursed "pillar banks" as sacrosanct. All three are intent on slimming down the industry. Simultaneously, they connive to fatten the insiders. So craven is the Government that it is happy for the boss at the Bank of Ireland to earn nearly four times the pay of the Minister for Finance (€189,000).

Joe Walsh is one of the fig leaves, the 'public interest' director fronting these excesses. Of course Joe and the rest of the gang never expected to mix it with mere grubby TDs.

The restoration of the bankers' hegemony can be seen everywhere. Nowhere is it more visible than in the biggest problem facing the Government today – the runaway train of mortgage arrears. Together, bankers and ministers have produced a wickedly slimy response – the Personal Insolvency Bill. They have sold the Bill to the public as a humane panacea for the agonies of those in personal debt. Various solutions are offered to the one in four borrowers whose mortgages are now in trouble. Unfortunately, buried in each settlement there is a fatal flaw: the lender has the last laugh. The bankers can veto any deal between borrower and lender. Instead of giving an external party the power to impose an independent debt settlement, the Government donated the final decision to the bankers. Worse still, a sneaky little clause in the Bill allows the banks to return to attack the earnings of a discharged bankrupt for another five years.

The Personal Insolvency Bill, the Government's response to the personal debt crisis, could have been written by our two spooks.

The Bill will not sort out Ireland's mushrooming mortgage debt. Ominously, as 2012 closes, the Central Bank's gloomiest projections for mortgage arrears deep into 2013 have already been surpassed. The banking stress tests of 2011 are now irrelevant. The number of defaulters will rocket in 2013 when borrowers are forced to pay the unjust property tax. Young couples will opt to fall further into mortgage arrears when the home tax is confiscated from their pay cheques by the Revenue Commissioners. A further recapitalisation beckons as the timebomb ticks away.

The Anglo promissory note will be a picnic of a problem in 2013 compared to the mortgage debt. Expect the Government to broker a lousy deal on the promissory note before the March 31 deadline.

Expect them to sell it as a "breakthrough". Pat Rabbitte was telling the truth when he revealed that the €3.1bn due will not be paid today. More will be paid tomorrow.

The Anglo note is not the test of banking policy. The test runs much deeper. An end to the devil's pact between government and bankers should be on our 2013 wish-list. Perhaps the Cabinet could break out of its chains and send some of the top bankers packing. What could be more symbolic of change if we saw Mike Aynsley of Anglo (€866,000 package) return unrewarded for loss of office to his Australian homeland? Or if Richie Boucher was given extended leave of absence to visit his alma mater in Zimbabwe – although it is doubtful if even President Mugabe would offer him a post. And maybe we will see all the overpaid pensioners like Walsh, MacSharry, Spring, Somers, Hayes and Considine finally put out to grass?

That would be a start. Then we could drop the crazy pursuit of the pillar bank duopoly, introduce competition, demand a debt write-off from Europe to give us space to sort out the mortgage crisis. And perhaps, the banks could finally begin to lend to small business again.

Hell will freeze over first.

Shane Ross is the independent TD for Dublin South.

Sunday Independent