Brian Lenihan Jnr (Dublin West, Fianna Fail)

I move: "That the Bill be now read a Second Time."

The Joint EU-IMF programme commits the Government to a comprehensive restructuring of our banking sector. The Credit Institutions (Stabilisation) Bill 2010 gives the Minister for Finance the necessary powers to effect that restructuring as quickly as possible. The fundamental rationale for this legislation is well expressed by the detailed set of recitals contained in the Bill before the House. In essence, these highlight the persisting adverse impact of the banking crisis on our economy and the need in the public interest for strong measures to resolve the continued serious threat to the stability of the financial system generally.

The Preamble to the Bill stresses the necessity for the functions and powers provided under the Bill to reorganise the guaranteed domestic credit institutions in the context of the National Recovery Plan 2011-2014 and the European Union-International Monetary Fund programme of financial support for Ireland, consistent with EU state aid requirements. The Preamble also reiterates the basic justification for the very substantial financial support that has been provided by the State to the banking system, namely, to make certain that these institutions continue to meet their financial and regulatory obligations to maintain public confidence in our banking system and, in particular, in the security of deposits. Extraordinary and exceptional challenges still face our banking system and the economy and there is a strong public interest in the introduction of the extensive ministerial powers included in this Bill, the details of which I will outline to the House shortly.

This Bill represents an intensification of the measures already adopted by the Government such as NAMA and bank recapitalisation to ensure that there is a viable and long-term banking system in the State to meet the needs of the real economy and underpin our economic recovery. The purpose of the bank restructuring measures set out in the joint programme is to ensure that the sector is proportionate to the size and credit needs of the economy. The objective is to capitalise the banks to the highest international standards, thereby rebuilding investor confidence in the Irish banking system in due course and restoring their access to normal market funding. This will, over time, facilitate a very significant reduction in the domestic Irish banking system's reliance on funding from the euro system and the Central Bank of Ireland and put the Irish banking system on a more sustainable funding platform.

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