Joan Burton (Dublin West, Labour)

I share Deputy Bruton's frustration. We have faithfully attended the Oireachtas Joint Committee on Finance and the Public Service and put many of these questions to the Financial Regulator and the Governor of the Central Bank in great detail. In reply we have received polite, meaningless words. All they ever say is that the fundamentals are okay. Why should we take the Minister at his word? He is standing on the word of the Financial Regulator and the Governor of the Central Bank. However, it has been proven that their response has been inadequate and the Minister for Finance is, basically, relying on them. The Minister is sitting on top of a house of cards.

The Minister remarked that the banks should issue capital. I presume he is referring to a rights issue. Given the current position of the shares, which shareholders does he expect to take up a rights issue? Is the Minister suggesting that he envisages, and is he positioning himself for, the takeover of several Irish banks by foreign banks or, perhaps, by very wealthy Irish individuals? Are there people among the group of wealthy Irish individuals who are sitting and waiting to pounce on some of our banks as the share price tanks? Should the Minister not be more forthcoming to the House on the scenario he envisages? What will the basis be for the valuation requested, involving expert accountants, of the loan books of the banks?

At the weekend IIB bank raised its bad debt provision very significantly. This was presumably on instructions from its parent company. If any of the other Irish banks mirror that action, bearing in mind some of them are much more exposed, surely the level of bad debt provision required for impaired assets, not so much for property as for land, will be very significant? This will create a sizeable further hole in the banks' balance sheets and drive their share prices even lower, if that is possible. What is the Government strategy to address this issue? Is the Government considering the first Paulson plan, namely, to create some kind of asset management vehicle and take the bad debts? The Minister for Finance and the Taoiseach have indicated they do not favour taking an equity stake in the relevant banks.

If the assets are as badly impaired as appears to have been suggested, will the Minister consider a Paulson 1 formula? I refer to a formula whereby a kind of asset management company is established to take toxic assets off the balance sheets of the banks and perhaps park them. Is the Minister thinking about using the National Treasury Management Agency and the National Pensions Reserve Fund, in some respect or another, as the parking lots in this scheme? There are two ways of approaching this matter. The Minister can approach it from the assets side by taking the assets out, or he can approach it from the capital side by recapitalising the banks. There does not seem to be any other way of doing it. The Minister has suggested that the banks could recapitalise themselves. In the current market, does the Minister think it is realistic to believe the banks are likely to be able to do that in the short term? Can the Minister give the House an indication of the revaluation basis?

It did not escape my attention — it may be historically significant — that the date on which the Government announced the rescue package was the date on which Anglo-Irish Bank's financial year ends. The other banks have different financial year end dates. In time, history will tell us whether that is of significance in the context of this scheme.

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