Brian Lenihan Jnr (Dublin West, Fianna Fail)

I can assure the House that what is very clear is that this Bill provides a strong, robust, enabling framework of reforms which must take place. This will be complemented and strengthened by the details included in the scheme to be laid before the House, which will map out the real and sustained change in the banking culture of this country that this legislation is designed to achieve.

An issue raised by Deputy Ring and a number of other Deputies was the question of persons who are in financial difficulties. We have a consumer protection code operated by the Financial Regulator which requires entities to undertake suitability assessments before offering products or services to consumers. A small minority of borrowers develop debt problems. House repossession is generally a last resort for lenders. I understand that the member institutions of the Irish Banking Federation have a voluntary code of practice on mortgage arrears and a code of practice for personal customers. The Financial Regulator is involved in ongoing work in that regard.

The Financial Regulator and the Central Bank have been criticised during this debate. Under this country's legislative arrangement, the Central Bank is at the front door and the Financial Regulator is at the back door. That arrangement is the envy of many European countries. It was a good arrangement in this instance because it enabled me to invoke a certain degree of assistance during this crisis. It facilitated a joined-up operation on the part of the Financial Regulator and the Central Bank as they analysed this matter. That analysis was of assistance to the State. Irish regulation has traditionally been based on principles. There is a huge international debate on the robustness of systems of regulation in every country, as banks are buffeted by the current crisis. As I said yesterday on the radio, I would prefer to leave to another day any detailed examination of how we can improve our regulatory practices and make our legislation stronger. We will have to have that debate. The key point in relation to this legislation is that it is establishing a new regime for the six designated credit institutions. That regime is backed up by an amplitude of powers vested in me. I appreciate the huge responsibilities which this legislation will impose on me. One of my responsibilities is to ensure we get this right.

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