Pat Rabbitte (Dublin South West, Labour)

Will the Minister be more clear with the House in terms of the admission of banks not headquartered in this jurisdiction? The statement he made in the first interview he gave on this yesterday morning made plain it was to refer to six institutions originating in this State. Now, he is stating that it will be wider than that, and it probably must be. How will the Minister ring-fence this? The Bill refers to credit institutions as defined in the Central Bank Act 1997. As I recall, under the 1992 regulations the definition states that a credit institution takes deposits on the high street. Will this be the definition? Will any bank licensed by the Central Bank to take deposits on the main street here be entitled to receive the protection of this guarantee? It is important that we have clarity on this.

To what extent will this expose the Irish taxpayer in terms of business done outside the State by these banks or the original banks? One of our banks has a significant influence in Poland. Is the Minister satisfied that he cleared the competition aspect of this? How will a local Polish bank view the liabilities of Irish Bank Limited, Main Street, Poland, being secured by the State? Did the Minister get clearance from the Commission on that?

I also wish to ask the Minister about the capacity of these banks to parcel up loans, including some of the bad loans, and sell them off as asset-backed securities. As the Minister knows, there are different ways in which the banks here source money. Approximately 40% is sourced from deposits, while other money is raised on the wholesale market or the interbank market. Some money is raised in asset-backed securities whereby a vehicle can be used to combine various loans and sell them off. In this situation it seems the banks will be able to put a Rialtas na hÉireann stamp on that and, if they want, a photograph of An tAire Airgeadas, Deputy Brian Lenihan, and sell them off on that basis. When the Minister talks about tighter regulatory control, what steps will be taken in that regard? It seems to be an invitation to banks that are so minded to use this stratagem to get some of the bad loans off their books. They will do that while fully secured by the Irish State's indemnity. I would appreciate if the Minister would make some attempt to address that point.

I welcome some of what the Minister said in his statement, including the fact that the scheme will be published next week. However, he did what everyone would do in his position — he answered the questions that he wanted to answer, but did not answer others. I am glad Deputy Tom Kitt came in to contribute to the debate because if he had not done so, there would not be any answers. Those of us who have been here since early this morning were glad he came in to raise questions of which none of us had thought. I would appreciate if the Minister could answer those questions when replying this time.

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