Brian Lenihan Jnr (Dublin West, Fianna Fail)

Yes, equally in that circumstance. As noted by Deputies, the crucial, fundamental point in this legislation is in section 6, that financial support "may" be provided in a formal manner determined by the Minister. The Minister is not required to provide financial support under this legislation. A scheme will be brought to the Houses for discussion and, if approved, it will be implemented in the form of individual contracts with particular banks. However, I assure Deputies that those contracts will give the Minister the right to back out at any time. This would be the normal commercial element in such an arrangement. That is the conclusive answer to that issue, which is a legitimate issue of concern.

Deputy Shatter also raised a technical issue on section 5(1). This has been examined by the Parliamentary Counsel, who is satisfied that the provision relates to regulations to resolve difficulties in operating the Act related to a specific intervention in a specific banking instability position in one institution.

Deputy Bruton asked me to outline the role of the National Treasury Management Agency regarding this legislation. The function of the agency is to provide the Minister for Finance with expert advice on financial transactions, the investment of money, the taking of securities and the issue of bonds. Were the Minister to have to exercise some of the powers referred to in this legislation above and beyond the guaranteed powers, where it is intended to bring forward a definite proposal, the NTMA would have a role in advising the Minister or exercising the powers directly regarding a troubled institution. The NTMA will play a crucial role in the operations carried out in that regard under this legislation.

Regarding the position of the NTMA liaising with the Financial Regulator, the NTMA reports directly to the Minister, aside from the Department. This is an aspect of its founding legislation which has always been there because its functions were always in the Department and there has always been a direct relationship between it and the Minister. I have no doubt that the NTMA would liaise with the Financial Regulator in the same way as the Minister can in the presence of the Chair. A practical working arrangement for on-the-ground operations might be essential in circumstances where the NTMA was carrying out operations. Reliance on the Financial Regulator is of more fundamental importance in the guarantee scheme we are bringing forward than in the kind of un-contemplatable operations in which the NTMA might be engaged.

Regarding the question on section 7, the modification of the competition provisions, there is no reference to the Dáil. One of the obvious reasons for that, as we have seen in the recent European crises, is that some amalgamations and mergers have taken place over the course of a weekend or overnight. Very rapid responses have been required in the current financial crisis and that is why section 7 has been inserted in the legislation.

The Minister has power to subscribe for shares in a credit institution in the event that financial support is granted. Based on the Swedish model, Deputy Burton proposes that share subscription should be mandatory in all cases where financial support is granted. I cannot accept the amendment because it is important to retain ministerial discretion in an individual case where we may assess a credit institution's instability as temporary. However, were there evidence of permanent instability in an institution, the course of action proposed by the Deputy would be the policy of the Government.

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