Peter Mathews (Dublin South, Independent) | Oireachtas source

I thank the witnesses for their attendance. I wish to pick up on something Deputy O'Donnell mentioned, the balance sheet repair that the institutions are undertaking. The problem that has arisen for everybody across the markets, not just Ulster Bank, is due to the creation of credit by the abandonment of fractional reserving. Ulster Bank is part of RBS Group and in 2008 RBS Group, if one ignored ABN AMRO, which had a good balance sheet, had loans-to-customer deposits ratios of 135%. That is 45% above the safety level of 90% for prudential lending and responsible bank board operation. Forty-five per cent as a proportion of 90% is 50%. When Ulster Bank is in a sector of banks where the average loans-to-deposits ratio was 173%, with an abandonment over seven years of fractional reserving, absolutely reckless balance sheet construction and creating an asset price bubble with the credit that had been gathered through the banking system, that bank is responsible for 50% of the asset price fall of assets bought with funds provided by the bank. That is a fact mathematically. In the case of Bank of Ireland, it is 75% responsible and accountable for the asset price fall of the assets that were bought with funds loaned by Bank of Ireland to its customers. It is really a breathless, astonishing arrogance on the part of the sector to seek to collect 100% of the loans that created a mirage. It was a bubble of air to which the customers are now long-term mortgage slaves.

In fact, let us consider the etymology of the word "mortgage". "Mort" means death. Normally it was death of the asset while the borrower was repaying the money so that the asset became his or hers at the end of the 25 years. Now, because of those seven years of profligate and absolutely malfeasant lending by the boards of banks, the borrowers of that period find that they have no assets. The only asset that they might have had after 25 years is likely never to be theirs. The nonsense that is being peddled at the moment, that the property market is taking off, is absurd. It is like saying that the stock market has gone up in value because 1% of the equity on the stock market has been traded at a temporarily high price.

This is where we must get real. I do not like the language and terms such as "encourage meaningful re-engagement". Let us get real about this. The bank had a breakdown in its computer systems for three or four months but there was no engagement, even with people who had deposits or credit balances in their accounts. This is unfair. I am not asking for heads or scalps, just for fairness. A total of 15,000 customers of the bank are in deep distress, mental depression and even facing death. It is wrong. I am asking all the witnesses to put it to their boards that they really wrecked this country.