Kieran O'Donnell (Limerick East, Fine Gael)

Tonight is an historic moment for Ireland. While we discuss this Bill, people are looking on who are fearful of losing their jobs or who cannot secure access to finance for their small businesses. The chief executives of four banks appeared before a meeting of the Joint Committee on Finance and the Public Service last July. Fine Gael specifically requested their attendance to discuss the issue of the difficulties encountered by people in accessing credit. The witnesses told us there was no problem and that they were continuing to lend money. Clearly, they were not. Those people have seen today that while they could not access credit, the same is not true for the banks in their moment of difficulty.

It is extremely important that the measures introduced under this legislation should not only benefit the banks but also small businesses and those who are seeking mortgages. In particular, we should bear in mind two consequences of this proposal. First, the banks are now able to access further liquidity on the interbank market at a lower rate than they were being offered yesterday. They must pass on that lower rate to hard-pressed customers. Second, Government bonds have increased in value in terms of the returns people will expect. That will affect the taxpayer. I am glad the Minister made reference to the guarantee scheme and how he proposes to put the mechanism in place. However, it is important that the taxpayer does not pay the cost of these measures.

Under section 6(4), it is proposed that all financial support shall, "as far as possible", ultimately be recouped from the credit institution or subsidiary to which it was provided. It is important that we devise mechanisms whereby the taxpayer does not pay for these provisions. We will bring forward proposals to that effect on Committee Stage. The Minister made reference to the buffer made up of equity and other risks. However, he made no reference to potential bad debts that the banks must write off, to ensuring they do not pay a dividend and that there will be an end to the awarding of excessive bonuses to chief executive officers, and that they do not engage in risky practices.

We are operating in changed circumstances and there is a requirement for new regulatory measures. Deputy Kenny referred to the Government making appointments to risk management committees within the banks. In addition, an overseas board should be appointed by the Government which would include the Financial Regulator and the Governor of the Central Bank.

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