Sean Barrett (Independent)

Like other Senators, I welcome the Minister to the House and wish him every success in this daunting task. By any standards, the Department of Finance was not fit for purpose, and the reason the country is in so much difficulty today is because the Department was dysfunctional. The Nyberg report stated that the Department of Finance was not consciously involved in financial stability issues but one could ask what it was doing. The Wright report refers to a lack of expertise, with only 39 of the 542 staff trained as economists to masters level or higher. That is 7%, as opposed to 60% in Canada and 40% in the Netherlands. There are problems in health and education because the Department of Finance was asleep at the wheel. I welcome the new troika of Howlin, Noonan and Hayes in looking to implement vital reforms.

There are no records of the meetings concerning the rescue of the banking system worth five times the country's gross national product. When the Minister contacted the spending Ministers regarding co-operation with the spending review on 11 April, he said it should be done quickly before they were captured. Surely the greatest case of regulatory capture of all time must have been the capture of the Irish economy and Exchequer by those banks in September 2008. They should have been put on the plane to Frankfurt and that is where the problem should have resided. There was a memorandum of understanding indicating that this would be a European problem and the Minister referred to the problems with the banking section of the Department of Finance. Those in the Department may have forgotten that there was a mechanism other than virtually bankrupting the country in dealing with insolvent banks.

There is also a moral hazard problem, as the taxpayers and unemployed have borne the costs of this performance, with banks and their regulators getting away remarkably free. We are now trying to reinvent the Department of Finance and the entire Irish economy. In his latest bulletin, the Governor of the Central Bank stated that the banking system must be downsized and reorganised. That should have been done in 2008 rather than going to significant expense to end up with a smaller banking system. We should separate the deposits which exist for storage and investment. The bondholders should be given equity and the Central Bank should involve itself in banking only for the purposes of liquidity and not for solvency.

We must also examine the accountancy profession. I am still waiting for the chartered accountants regulatory body to report on how money moved into banks at 11.50 p.m. and moved out at 12.10 a.m. is treated as if it were a real deposit. The accountants should be rebuked by the Government for their tardiness in dealing with the lack of accountability in accountancy, which seems almost an oxymoron but that is the truth of it.

Turning to the director's responsibility of the Minister, we need a council of economic advisers to bring in what the report calls a contrarian view, that economic policy was decided in too small a circle of people-----