Ned O'Keeffe (Cork East, Fianna Fail)

Corporate governance does not work in our society. We have audit committees and remuneration committees. To whom do they report? Who appoints them? They are appointed from the weakest people on the boards who will agree to everything and report back to the chief executive for fear of upsetting him or her in any way. There must be a complete change in the auditing system.

Some other matters I found shocked me. To solve the core of the problem would take a magician, not legislation in this House. The Irish external debt at 13 September 2008 was €61 trillion, an increase of €51 billion on the previous quarter. The Irish banks borrowed tens of billions of euro from other European banks. These loans are generally borrowed on a short-term basis and, in many cases, are repayable over 12 months. However, the money was loaned in the vast quantities for speculators for terms of up to 20 years. That is why we have a crisis. International banks will seek their money back but the speculators have squandered it.

I do not agree with everything Deputy Burton says. When I sat on the finance committee with her, she was more concerned about bank charges and competition than about liquidity and the difficulties facing the Irish banking sector. We were in a hurry to get foreign banks in here, such as Bank of Scotland and Royal Bank of Scotland, which I would class as two rogue banks. They are in the height of trouble in the UK. They over-loaned. Royal Bank of Scotland is synonymous with Ulster Bank in the Irish context and the Minister is supposed to guarantee Ulster Bank along with the initial six. We are in a crisis because they came in here.

I follow movements on the stock market and read Irish newspapers, as well as those from Britain. It was reported on 18 June that the Royal Bank of Scotland was warning of a fully-fledged global crisis. That bank was warning about a crash and then it crashed itself. There is no point in condemning British banks or Irish banks, because they are of the same family, with the same system. The only difference is that the British have sterling and we have the euro.

The auditors of the banks certainly have a case to answer because so many warning signs were evident. The red light was shining for years but nobody called "Stop". Other countries can afford to rescue their banks but Ireland is in such a difficult financial state, with only 4 million people, that no such choice exists. Of course, Ireland was in extreme financial difficulty even before the credit crisis. In a free market economy, where enterprise and progress were encouraged, who landed us in this mess and what is to follow?

Directors of banks are appointed on a——

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