Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

First of all, I welcome Deputy Sean Fleming to the ranks of the socialist left on banking policy. He has arguably swapped places with Deputy Rabbitte. I wish to follow up on the question because, frankly, I am perplexed at Professor Honohan's belief in and commitment to competition as the way to sort out some of the issues that confront us. He has not really made the case for it. For example, he rails against administrative control of interest rates, that is, the State setting interest rates - even though he seems to suggest that they should be reduced and that there is an element of profiteering going on. However, he says we should not really have administrative control because that would impact on competition and the reason we must not impact on competition is just that we need competition, but without any real argument to sustain that. It was precisely the dynamic of competition that led to the bubble, uncontrolled lending and the crash that followed, so I really am quite perplexed.

It is not just in the area of interest rates that the argument does not stack up. Professor Honohan finished his contribution by saying that the banks have been damagingly slow in resolving the mortgage arrears crisis. That is a good case for administrative control, as are variable interest rates and what is happening in the whole property area. I would also like to hear Professor Honohan's comments on that. It is extremely worrying that property prices are going out of control, as that was such a big contributory factor to the crash. We had property prices going out of control, and people with low incomes were borrowing money they really could not afford, while chasing property whose prices were going through the roof. That also led to the crash. I do not see, therefore, how Professor Honohan can support his argument that, faced with these serious challenges and problems and the experience that we have just been through, the answer we have to get back to is competition.