Brian Cowen (Laois-Offaly, Fianna Fail)

No one takes pleasure from any financial institution getting into difficulty. Lessons will be learned from the turbulence by finding out what caused the problem and what practices were allowed. We have already seen US Treasury Secretary Paulson commenting on what he felt were lax regulatory standards, the need to review the regime in the United States and how it operates in regional markets within the United States and a range of issues on which he is far more expert than me. Obviously, adjustments are made and lessons learned.

The first priority when there is turbulence is to provide for stability and restore confidence. The inter-bank market dried up because of a lack of trust uncharacteristic of how banks operate where people started to look again at risk and ask if the loan books were as robust as was thought. Of course, when they see a problem, people start to adjust to see if those with whom they are dealing are in as good health as they thought. The cost of providing short-term or longer-term money goes up as a result of the reluctance of many to provide that level of liquidity given what has happened. These matters must be adjusted and lessons learned but as we try to do this and improve the regulatory system, there will be a warning light before issues reach the stage where customer confidence is lost.

In the interests of financial and market stability, a high priority will be given to any recommendations that derive from the collective and expert consideration being given to these matters, particularly given the complexity of the products available, the level of product innovation, the freeing of markets and the ability of capital to cross frontiers in a way that was unthinkable 15 years ago. These factors bring with them attendant risks, as well as attendant benefits in terms of access to capital and the ability to fund enterprise and growth and create jobs and wealth. That is the case in any capitalist society.

I am not dismissive of these issues but we must maintain perspective and provide for a calm and sensible approach in order that people do not start to draw unjustified conclusions and cause further problems.

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