Richard Bruton (Dublin North Central, Fine Gael)

This section is the main meat of the Bill and there are several amendments to which I wish to speak. I will deal with them as quickly as I can. Amendment No. 10 arises from concern that the Minister, in defining the guarantee and the types of deposit to be guaranteed, appears to extend the definition in the Bill compared to what he said in the press release he issued yesterday. In other words, he is saying the financial support and other guarantees may be made in respect of borrowings, liabilities and obligations of any credit institution. This is wider than the definition we saw previously. We want an assurance that this does not reduce shareholders' equity that would act as a buffer to protect taxpayers. We want reassurance as to why this wider definition of what financial support can be given.

We endorse amendment No. 12 in the name of Deputy Joan Burton and me. I admit she was author of the amendment. It is a good idea that there be a report to the Public Accounts Committee on the operation of the Bill. This would provide reassurance that it is operating as the Dáil hopes and that the schemes, regulations and conditions we have made were not only approved but over time have worked in the way intended.

Amendment No. 14 in my name — Deputy Burton put forward a similar amendment — looks at the provision the Minister appears to make that he can provide guarantees on a non-commercial basis. This debate has been based on the understanding that the guarantee will be provided on a commercial basis, but he now he appears to be giving himself the power to decide that in some instances it would not be a commercial guarantee. I cannot understand the reason for this. To satisfy State aid rules the Bill must pass, and the Minister could not provide for a situation where support of this nature would be provided on a non-commercial basis. Therefore, I seek to delete the option of non-commercial terms being offered in this instance.

The Minister has agreed that a scheme will be laid before the House. He also seems to indicate that apart from the general scheme, there may be individual separate agreements. Presumably, these would be agreements negotiated with individual institutions. I understand there may be confidentiality attaching to elements of some agreements, but I am uneasy about the fact that there may be wholesale departure from the general scheme through individual agreements. Will the Minister explain the reason for individual agreements? We should be entitled to see a broad outline of the areas in which an individual agreement will differ from the general scheme if this is to be part of the rolling out of the Bill.

I welcome the Minister's indication that he will produce an amendment in the Seanad that will provide that the scheme will come to the House with the opportunity for debate and approval. I understand he will produce a draft that he will table in the Seanad before the Bill returns to the House in the morning. Will he indicate or read to us the terms of that scheme? I hope we will have time in the morning to satisfy ourselves on that.

In amendment No. 23 I have raised an important consideration. In the scheme he outlined earlier, the Minister said it would involve the basis on which charges were to be made and the conditions under which admittance to the scheme was granted. If that is all the scheme contains, it only tells us what the terms are for an institution to get in the door of the guarantee. It does not tell us about their obligations when inside the door and covered by the taxpayers' guarantee. My amendment seeks to ensure the scheme includes some of the other elements outlined by the Minister as to how the new regulatory approach will apply now the taxpayer is guaranteeing the deposit. If the taxpayer is guaranteeing the deposits raised, we need assurances with regard to how the moneys will be used. We must be assured it will not be used for building property in eastern Europe or for gambling on derivatives, but, as the Minister said, for enterprise in Ireland. It must be used in a proper way and we must have codes of practice in place with regard to risk. When the Minister presents his scheme, it should pin down the wider terms and I hope he will indicate that is the intention.

Amendment No. 26 is at the core of what we have asked. I welcome the Minister's indication that he is positively disposed to having a public interest member on the boards of the banks covered by the scheme. We want to see such a person there riding shotgun for the public interest. We also want to see that person or someone else on the risk assessment committee. The reason is that it is conceivable that a bank familiar with property dealing could decide, now that it has access to funds, that it should go into property development in Poland or Bulgaria on the back of taxpayer guaranteed deposits. That would not be in accord with the intention of this legislation. It is important to pin down the terms of the scheme and that is the purpose of our amendments.

I left out amendment No. 16, which proposes to delete the words "Without prejudice to the Minister's discretion, all" and to substitute "All" so that it reads "All financial support will be recovered" from the credit institution. Why is there a need to include the retention of discretion by the Minister? If the scheme is to get through the state aid rules, it is difficult to see how the Minister can retain discretion to not recoup the support he provides. To protect the taxpayer and ensure the legislation is robust and will withstand any examination under state aid rules, the deletion should be made.

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