Ivana Bacik (Independent)

I am grateful to Senator O'Toole for sharing time. I agree with the Senator that we share a unity of purpose and we all appreciate the necessity that the Government take decisive action to maintain confidence in the economy. Nevertheless, I will criticise the Bill, albeit in a constructive manner rather than for the sake of it. I am genuinely unhappy with many aspects of the Bill about which there is immense uncertainty. While I note Ministers' comments that the proposed measure will not cost the taxpayer up-front, there is no doubt it will expose taxpayers to an enormous potential liability. The figure of €400 billion is extraordinary. We are effectively giving a guarantee to a banking sector which, in the words of Government spokespersons, has acted recklessly in the past. The Bill provides insufficient guarantees that it will not act recklessly in the future.

I cannot accept the assurances of Ministers and others regarding the substantial equity-based buffer of €80 billion because it sounds like a fiction based on an overvaluation of the property and assets held by banks. It is clear these assets were overvalued and there is no doubt Irish banks hold some toxic debts. None of us knows the extent to which their debts are toxic or the precise liability to which we are exposing ourselves. Given this degree of uncertainty and in the absence of stronger guarantees for the taxpayer and stronger assurances on when the charging regime will come into play and how banks will be penalised if the taxpayer is forced to pay out money, it is difficult to support the Bill.

We were told the measures in the Bill would extend to six institutions. It is difficult to see the reason only six institutions were chosen. An argument has been made about increasing the number. Clearly, however, if more institutions are covered by the measures, the potential liability for the taxpayer will increase. This is another matter of concern. We already know the measures have the potential to impose significant costs on the State coffers should the cost of borrowing increase. The Bill has received strong support from bankers and financial institutions, as one would expect if the measures amount to some sort of bailout. It is very difficult to take their assurances at face value. As Senator O'Toole noted, it is difficult to trust institutions when we know that much of what we have been hearing about the stability of the sector has not been true. If the capitalisation is so secure, why do we need to give this guarantee in the first place? With this level of uncertainty, it is hard to support the Bill, much as I appreciate the need for some form of package to ensure confidence in the economy.