Martin Mansergh (Tipperary South, Fianna Fail)

I thank all Deputies for their contributions to the debate, particularly the spokespersons and leaders of Fine Gael and the Labour Party. The Minister will take careful account of everything that has been said in the House, both this morning and last night, in drafting the scheme and proceeding generally with the legislation.

In reply to Deputy Bruton and others, the basic point is that the content of the scheme is under review by the Minister. However, there are a number of areas that may be included, for example, the need for individuals with a public interest perspective on the boards of our credit institutions; codes of practice for the work of risk committees in financial institutions; pro-enterprise lending practices; quality of management; checks on remuneration approaches that reward short-term performance and excessive risk-taking; the need for a return to traditional banking values in all our credit institutions; responsible and prudent lending practices in consumer lending; promotion of corporate social responsibility; careful assessment of the risk characteristics and sustainability of new financial products; and ensuring the highest standards of regulatory compliance and effective standards of corporate governance which ensure bank boards take full account of their broader responsibilities to society at large.

The Minister is considering the issue of a possible extension of the scheme. It has not been determined whether the scheme will deal with this. It is obviously not appropriate in advance of the presentation of the scheme to discuss in detail the content beyond what the Minister has outlined. I fully agree with Deputy Burton that the whole point or motivation of this legislation is to protect the real economy, living standards and jobs. The legislation has been brought forward because of fears of the impact untoward events would have had on the real economy, as she calls it, if that action had not been taken.

The issue was raised as to whether the scheme would affect the budget. It will not affect the general Government debt or general Government borrowing unless liability is realised. The issue was also raised about UK-owned subsidiaries operating in Ireland. No decision has been taken and the Minister has indicated he will consider it. The Government will have no tolerance for any financial institution which seeks to exploit competitive advantage from this guarantee. It is the Minister's intention to calibrate the payment for the guarantee such that a balance is achieved in the market between those that benefit from it and those that do not.

Comments were made about the Financial Regulator. It is important to put on the record that a number of important steps were taken by the regulatory authority in response to the very rapid growth in credit, including the introduction of the consumer protection code to safeguard the interests of consumers in their dealings with financial institutions, which included such requirements as client suitability, "know-your-customer" requirements, the stress-testing of loans to plus 2.75% above current lending rates and increased capital provisioning for riskier loans, such as property development.

The Minister has stated that higher funding costs for the Government should have input into an assessment of the charge imposed on those benefiting from the scheme. Certainly, there may be an increased cost of borrowing due to higher funding costs which have added eight basis points.

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