Peter Mathews (Dublin South, Independent) | Oireachtas source

I do. To set the scene for my contribution, I am always last. Even though one might see me first, I must be the last to contribute even though we have a very good Vice Chairman. That is because I am not a member of this committee because I was removed from it on 3 July 2013 and I am not allowed to be a member of any committee because of a conscience vote.

This is an area in which I have a lot of experience. I am interested to hear that the law does not improve the scene when the ownership of a loan moves from the original owner or lender to a new owner. However, as the Vice Chairman and Mr. Joyce said, the actual small print terms and conditions, which become magnified when things go wrong, show that it was a very unclear position at the start and that everything is massively weighted in favour of the lender.

Let us think about the lender. The lender was part of a class called the banking or financial services sector, which is becoming the financial self-services sector. This sector allowed its balance sheets and the financial engineering of the domestic banking economy to become absolutely dangerous over a period of about seven years through a credit pyramid system, effectively a Ponzi scheme. The sector is now trying to repair that financial engineering on balance sheets which involves the sale of loan books by those institutions that remain, some of whom want to get out, as Mr. Joyce mentioned, and some of whom see that there may be some point in staying as interest rates change and they manage the interest rates differentials of what assets they have created and whether they are on fixed or variable and so on.

I remember back in the 1990s when there was some sort of good behaviour in banking that many of the banks with the exception of ICC Bank where I worked did not even define what the interest rate base was. They talked about the prevailing average cost of funds but that could be anything. If banks had stupid boards of directors, that could work out at 20% or 30% if they were paying too much for their funds. Their cost of funds is whatever they pay. It was not even related to what one could call objectively defined rates. Sometimes it did. It was the Dublin interbank offered rate, Dibor, or the Euro interbank offered rate, Euribor. As we have learned, they were then manipulated and fraudulently changed by the biggest banks in the world which cumulatively are paying fines of €140 billion for their reckless breaking of the law. I am afraid that I think the little people are again put in very vulnerable situations. It is up to us to correct this.

I will tell the witnesses a short story in 50 words. Ernest Hemingway wrote a short story in six words. It read "For sale: Baby shoes, never worn." Mine is 50 words. W. Ross Jnr. made a profit of €500 million on an investment of €290 million in Bank of Ireland shares. He was the largest single shareholder in the bank apart from the State. He was the most influential director on the board for the two years and ten months he held that investment. Having sold it for a €500 million profit and having been the most influential director on the board forming the policy of the bank which we know is not to have any principal write-down on any loan even in loan restructurings, which is absurd to me as a financial person but that is what it is stating is its policy, this man took his €500 million profit and went back to the US. He has no investment or interest in or directorship of the bank. That is a short story. That is the reality - €500 million. It is stark as the death of poor Jonathan Corrie on the steps outside the Dáil 48 hours ago. This is the modern Ireland in which we live and it is not right.