Peter Mathews (Dublin South, Independent) | Oireachtas source

To conclude quickly on that point that I was making about the banking sector as a sector with responsibility for the exponential bubble in asset prices which left this legacy of debt that Deputies Spring and Higgins stated is wrong, not only for an economy but also for people and households, I have come across households with suicides, break-ups and children being traumatised by hearing the rows about finance.

I would tell them to be encouraged and know they have support to make the case and insist that our leaders - our Government and Department of Finance - articulate the case. The sector should have been operating to the principles of 90% loans to deposit. That is called fractional reserving - reserving 10% liquidity on the loan side of the balance sheet. It did not do that for six years and now we have this wreckage. It is a tsunami and it is wrong that the people are in this hopelessness. It is just wrong and I will do everything and strain everything I can since I started the analysis of the overall banking sector.

I would love to see an update of the six balance sheets. EBS has now merged with AIB and Irish Life and Permanent is gone as well, but there is still the core of the balance sheets that were there four years ago that could be looked at and examined to see the funding on these. By the funding, I include the euro system. AIB says it has €15 billion or €16 billion from the ECB. It has some from the Central Bank. These guys should have been told before the promissory note was swapped into a series of 40-year bonds. That promissory note was created in three tranches. Mr. Honohan was a co-author of it with the euro system so there was never going to be a chance that our establishment and institutions would press the case hard with advocacy for a write-down on a euro system asset and for us, a euro system liability. However, if the two remaining pillar banks got €30 billion in a euro system creditor buy-in, our economy would be like a swamp drained. We would have a fertile country in which families and businesses could begin to work again meaningfully and not be depressed. I know I am speaking the truth.

Some people here did not even understand what happens with the transfer of loans into NAMA. NAMA in turn is selling some of those loans, some of which contain miscalculated interest about which I also know. That means that those loans are contaminated because they have rolled up capitalised interest. Buyers on a third-party basis for the third time will be buying loans with embedded toxic, miscalculated interest. That is like getting a diamond necklace containing three stolen diamonds. The law is not yet up to speed on this and reckless lending. The High Court does not even recognise reckless lending. I know that from Bill Prasifka who said that one of the problems he faces in dealing with complaints is that the law does not recognise it. That is a technicality. I showed the committee. Subtracting 155% from 90% results in 65% over a six year period of over-indulgence and splashing money that came from bond investors. A figure of 65% as a proportion of 90%, which is the base rate of prudential lending, is two thirds so the argument is very valid. I think Mr. O'Connor has previously heard that two thirds of the debt outstanding on the collapsed asset prices is not financially, morally or logically collectible.