Joan Burton (Dublin West, Labour)

Although the scheme provides that any call on the State to honour the guarantee will be met by a payment out of this designated account, Department of Finance officials in their briefing to me made it clear that such an event would amount to an act of bankruptcy by one of the covered banks. In that event we would be in a very different situation. The account, which the Minister says will have a maximum amount of approximately €1 billion, would not meet the liabilities that would arise if the guarantee was ever needed. The Minister stated repeatedly in the debate that it would never cost the taxpayer a penny but there is a hole in his scheme. If some of the banks go under, the €1 billion will not be enough so we will be back to the taxpayer. There is nothing in this scheme to suggest that the Minister will absolutely clean out the balance sheets of the banks to ensure that their assets are appropriately valued.

I welcome the notion that PWC will be undertaking a forensic examination but I suggest we wait and see what that brings up. However, a couple of days ago, the Financial Regulator came before the Joint Committee on Economic Regulatory Affairs. My colleague, Deputy Sherlock, was at that meeting. When asked this question by Deputy Sherlock and by other members of the committee, the Financial Regulator said again that the assets of the banks are sound, and that was only one week ago. The Financial Regulator seems to have a primary view that there is no fundamental impairment of bank assets in the long run. I regard that as an extraordinary viewpoint and I say that as an accountant — the Minister for Defence, Deputy Willie O'Dea, who is sitting beside the Minister for Finance is also an accountant. Despite this extraordinary viewpoint, the Financial Regulator as the manager of the scheme is the person on whom the Minister will rely. What confidence can we have?

I do not have a difficulty with the proposal to appoint directors to the boards of the banks. However, I presume they will be drawn from the same golden circle of friends of the banks, such as retired Secretaries General of Departments. We need people who do not belong to any golden circle and perhaps some of whom come from abroad, who are tough, independent-minded and who will not be beholden to the banks in the future and were not so in the past and who will give an honest opinion. Now more than ever we need a kind of "Mr. Deeds Goes to Town", "Mr. Smith Goes to Washington" — these were films about the Great Depression era in America, as the Minister will know. We need a Mr. Deeds who will without fear or favour sort out what is valuable in the banks and what has lost value, such as the assets which represent intense, reckless, stupid, greedy speculation in land. The Minister does not seem to have said that to the banks.

Under the scheme the Minister is taking powers to himself. I expect we can discuss this in greater detail in the question and answer session later. I ask the Minister to say whether he is satisfied that this is constitutionally possible within the framework of the scheme.

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