M J Nolan (Carlow-Kilkenny, Fianna Fail)

I welcome the opportunity to speak on the motion. I commend the Government on the action it took at the end of September when it was effectively compelled to do something to prevent our financial infrastructure from falling apart.

It is important to state we need a strong and healthy banking system. Our economy will not function without a financial system in which the public has confidence. A good system is a key element of our national economic infrastructure.

This debate is important in that shortcomings have been exposed in the work and practices of our banking industry. It is important to consider the role of the Central Bank and the Financial Regulator in this regard. If a lesson is to be learned from recent occurrences, it is that the Government, particularly the Minister for Finance, will have to adopt a more proactive and hands-on role in examining the operations of the banking system.

Banking stability is very important. It is important not only that customers and shareholders have confidence in our banks, but that our international partners do so also. In this regard, it was interesting to see the reaction of our European colleagues following the Government's actions at the end of the September. If there was any finger-wagging done, it had to be rescinded six days later in that the states concerned effectively took the same action themselves.

It is important to consider what occurred in the United Kingdom, where the Government had to invest in banks, and what occurred in Iceland, where banks actually failed. If any lesson is to be learned, it is that our Minister and Financial Regulator must adopt a more active role in the industry. I am pleased there will be a role for the Joint Committee on Finance and the Public Service and that the Minister will report to it on a six-monthly basis so Members of the Oireachtas can have an input.

See this speech in context