Peter Mathews (Dublin South, Fine Gael) | Oireachtas source

I thank the witnesses for attending and presenting the paper. I am a little concerned that we have allowed ourselves to see a long shadow looming over this country in the area of financial transactions, etc. It is a shadow that should not be there because there is not even a proposal yet. It alarms me that the country has decided to stay outside a conversation. They have said we should have a conversation with not less than nine members out of 27, one third of the participants in number, to see if we can address the following, which Ms McVeigh sets out on page 2. It states:

This will help to reduce competitive distortions in the Single Market, discourage risky trading activities and complement regulatory measures aimed at avoiding future crises. The financial transactions tax at EU level would strengthen the EU's position [and so on] to promote common rules for the introduction of such a tax at global level notably through the G20.

This is the germ of a good idea because even the leaders of Europe are thinking about the urgent necessity for a single supervisory regulator for the banking system and that that regulation would be seen to be working before they even start opening the levers of the European Stability Mechanism, ESM. We have an opportunity, therefore, as a member of the EU that has had the biggest financial explosion in the EU. We talk about €64 billion in capitalisation. That is not the figure. It is €135 billion of loan losses across the institutions in Ireland. The six Irish-owned ones account for about €100 billion. We saw in a report only three weeks ago that Certus, the wind down vehicle of Lloyd's Bank, has taken over the Bank of Scotland Ireland loan book, which reached a peak of about €40 billion, and has written off €22 billion.

We had a report last week from the Bank of Ireland. Amidst the noise the journalist magnified about pensions and salaries was the far more sinister aspect, namely, that on its balance sheet was €105 billion of total loans and a total provision against those loans of only €7 billion, with 74% of that loan book in mortgages, buy to let properties, property development, property investment in construction, etc. We are told that bank is among the most capitalised banks in Europe. It could not be when we had the biggest credit and asset bubble bust in the eurozone. There is not a chance that €7 billion of provisions will suffice. It should start at €20 billion and perhaps rise to €25 billion. That is an €18 billion shortfall in capital and it does not matter what the headlines say today about a bond of €1 billion being issued, taken away and so on, and Wilbur Ross and his friends putting in €1.1 billion for 35% of the bank. That bank has a mismatch on funding and assets, maturities on assets and assets in the wrong sectors that would blow the minds of anybody with experience.

We have to get real so that we can tell our creditors in the eurosystem that we need about €70 billion of creditor capitalisation, the elimination of the ELA in IRBC - this is all banking related; that is the reason I am going into it - the tearing up of the promissory notes, and a renegotiation of the capital funding of the two operating remainder banks to ensure that in turn those banks, under proper management, can start sorting out the assets they have, including the €105 billion in the Bank of Ireland, the approximately €120 billion in AIB, and the others because-----