Brian Lenihan Jnr (Dublin West, Fianna Fail)

A number of powers to patrol business practices are laid out in the scheme. I have the power to withhold approval from the covered institutions to acquire shares in other financial institutions and to prohibit them from establishing subsidiaries or entering into new businesses, if I believe that is appropriate. I also have the power to set rules governing the declaration and payment of dividends. All of these powers are vested in the Minister.

In addition, the Financial Regulator, after consulting with the Minister, can impose conditions regulating the commercial conduct of a covered institution's business to minimise any potential competitive distortion that might arise and to avoid any abuse of the guarantee. The Financial Regulator has the power to direct covered institutions to take risk reduction measures, which reduce the risk to the Exchequer under the guarantee is contained in the scheme. The regulator also has the power to limit the expansion of the activities of covered institutions in order to ensure that their aggregate growth and balance sheet volume is not excessive and does not exceed certain stated rates. The regulator can set targets on assets and liabilities, including loan deposit ratios, wholesale funding, total liabilities ratio, deposit growth and maximum loan to value on new loans, as well as direct covered institutions to set up appropriate funding structures and to comply with the liquidity, solvency and capital ratios that he or she considers appropriate. The regulator also has the power to withhold approval for share buy backs or redemptions from covered institutions. As well as these bare powers, I outlined earlier the steps already taken by the Financial Regulator to implement greater controls, which are on the record of the House.

Corporate social responsibility is dealt with in paragraph 45 of the scheme. The scheme requires the Irish Banking Federation, on behalf of the covered institutions, to submit a twice yearly report to the Minister on the goals and targets laid down on corporate social responsibility by the Minister. These include the delivery of the national payments strategy,the promotion of financial inclusion, the development of financial education and the implementation of the next phase of the Government's social finance initiative. These are ambitious goals in terms of the social responsibility of the banks.

The question of a national payments strategy goes back to a national e-payments strategy report published by the Information Society Commission in 2003. The report concluded that Ireland lags behind most of its fellow EU member states when it comes to modernising its payment systems. Following publication of the report, an implementation programme was established under the Department of the Taoiseach and the Irish payment services organisations to co-ordinate the actions of industry and stakeholders in moving towards electronic payments in Ireland. I moved that process forward in the budget announcement earlier this week. Deputy Sherlock may not be aware that I increased the stamp duty on cheques and lowered the duty on certain card transactions.

See this speech in context