Joan Burton (Dublin West, Labour)

I do not know if the Minister ever had the opportunity in his spare time to watch the film "Wall Street" or read the book Bonfire of the Vanities. If he did, he would know that €10 million is nothing to these people. In an operation where losses are being piled up, as in the Ormond Quay investment vehicle, this is just a pittance.

There is no evidence so far that the Irish Financial Services Regulatory Authority has taken action against anyone, other than it has suspended a number of operations which have seemed to operate outside of the regulations. The Minister's colleague, the Minister for Health and Children, Deputy Harney, famously once said that she would prefer Ireland to be closer to Boston than Berlin. I can only say that our Government and the financial services centre must be thanking God that Berlin came to the rescue in the case of Ormond Quay Funding whose exposure was over €20 billion.

The Minister may shake his head and be in denial, but we still do not know what happened. In this situation, where we have a globalised market in securities and improper dealing or excessive risk taking has taken place, it is worth asking whether the Minister has made any inquiries. Whether he likes it or not, that vehicle operated from this jurisdiction and went down here. Just as with the reinsurance episode two and a half years previously, we have had a narrow escape.

The issue remains. In practice, in areas that have come to light for investigation by the Financial Services Regulator with regard to banks overcharging or mis-selling products, the cost of the financial investigations has far outweighed any penalties levied. I am not aware that any penalties have been levied. It is foolish not to provide a regime of penalties which is proportionate to the amounts of money involved because, while for some people €10 million would be an enormous sum, for others it would not. Many of these financial derivative products are based on risk, basically on playing poker and having the nerve to take the risk and live with it. In that case, a fine of €10 million for the kind of sums involved is only peanuts.

I note the ultra-conservative approach the Minister has taken to regulation, which is to regulate as lightly as possible. However, in a falling market where a credit crunch is developing and where we have financial products that people do not understand well — many in the financial markets do not understand them well — the risk of a collapse and the consequent damage to the general economy from it is enormous. People heading out to buy a house will face higher interest rates and charges because of the credit crunch. Although this issue does not seem to have much direct impact on routine financial service provision, it is something that drives up interest costs. If banks are unwilling to lend on the inter-bank market, the effect will be felt within a couple of weeks by young couples trying to buy their first home.

Much of the material in the Bill relates to financial services with which many ordinary people are not involved. However, if they go wrong, there is significant impact on them and our economy.

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