Pat Rabbitte (Dublin South West, Labour)

This morning the Minister stated:

In the case of subsidiaries participating in the scheme, the Minister may impose specific obligations under the scheme to appropriately ring-fence the activities of a covered institution in order to minimise the covered institution's financial exposure to its parent credit institution.

When the Credit Institutions (Financial Support) Act was going through the House, the Minister said he would consider favourably one bank of several mentioned in the House. He said he might consider another and he certainly would not consider the others. What changed his mind on that? Was it the intervention of the EU Commissioner? Now that he has given them the option to sign up to the deed, how does he propose to ring-fence them? What will the Minister be ring-fencing? If an unnamed bank with a subsidiary has loans out in the United Kingdom, Poland or elsewhere, will we be underpinning those liabilities?

Given the fiduciary duty of a director to an institution and its shareholders, is it not the case that when the public interest representatives become directors of a bank, their first duty is to the bank and its shareholders? Are we sending out a false comfort signal when putting the word abroad that everything will be all right with a couple of public interest directors on the banks' boards?

Regarding the commercial rate, the Minister's colleagues, including the Minister for Defence, Deputy Willie O'Dea, who is beside him, were all rolled out after 30 September to repeat the mantra that we will be charging the banks a commercial rate. They all had that off, but many of them did not even understand what it meant.

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