Paul Connaughton Snr (Galway East, Fine Gael)

At first glance this seems a technical and complicated Bill. However, it deals with a number of issues that would have huge effect on ordinary people in the future. I can well imagine why it was decided that primary legislation should be enacted to copperfasten penalties as high as €10 million or ten years in jail. Those are large penalties and I can understand why secondary legislation would not be sufficient. When one considers that we are talking about markets across the European Union it is easy to see that penalties of this kind are necessary. There are always opportunists who are able to manipulate markets to their own advantage and have done so in the past. In my years in the Dáil I have heard on many occasions of crime gangs and opportunists of one sort or another who are involved in financial crime on this scale. While it behoves every parliament and the European Union to ensure that legislation is enacted to stop this sort of crime, there is always a new twist somewhere. Despite our best efforts and those of the European Union on this occasion, someone will get around these regulations at some time or another.

Given that we have a financial regulator, will all other financial regulators, irrespective of their guise in other countries, now be singing from the same hymn sheet? It is my understanding that the directives contained in the Bill have this effect. Does the European Union now write the script for the regulators? That is my understanding of the Bill and I ask the Minister to clarify the matter.

I understand that Statutory Instrument 60/2007 is 259 pages long and I assume it contains every conceivable reference to financial markets in the European Union. The core issue being addressed in the Bill is the requirement to introduce penalties at national level for breaches of the provisions involved. Like most legislation, it will ensure that the financial regulator will be able to levy fees on the financial services sector. I assume this will not involve a cost to the Exchequer and that the financial regulator will be able to levy fees on the users of the service. The same system operates for other regulatory provisions.

I note that the Bill repeals the Stock Exchange Act of 1995. Does this mean the Stock Exchange will be marginalised or has the measure more to do with the world of computers and electronics than with the workings of the Stock Exchange? I recently heard an item on the radio indicating that it will soon be possible to do some of the work of the Stock Exchange without having any connection to the Stock Exchange. Is this what is intended in this legislation? I assume it is on the way.

The relevance of the legislation to every person will be in the regulation of investment firms and credit institutions when providing investment services. This is why I say that no matter how one regulates a system someone will get around it somehow. The directive aims to create a pan-European market in investment products by replacing the various national rules with a harmonised European legislative system. I hope this will mean greater regulation of lending institutions.

We have been lucky in Ireland in having a strong banking system. I have been long enough in the House to remember a time when our banking system was not strong. That was not good for the economy at the time. There is great trust in our present system, although the excessive profits of the banks is another story. It is important that banks are financially sound and the people can put their trust in them.

The banks in the United States, the United Kingdom and other countries have so much money they are in a position to lend to themselves. This is called inter-bank lending. With the new culture of taking every opportunity to make more money, bankers have engaged in the new in-thing of sub-prime lending. I think sub-prime lending is a new form of hire purchase, HP. The younger Deputies may not know much about the time when people used to buy household items and cars on the HP. I am sure the Minister of State, Deputy McGuinness, knows what I am referring to——

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