Kieran O'Donnell (Limerick East, Fine Gael)

I concur with everything Deputy Bruton said. Everyone accepts that a recapitalisation of the banks must take place. However, such a recapitalisation must occur in the context of the facts as they exist. We understand that PricewaterhouseCoopers is due to present its report to Government by 20 December. However, we have not been provided with any details in respect of this report. The purpose of the PwC report is to investigate the position regarding bad debts within the banking sector, which forms the nub of the problem in respect of the loan books of the financial institutions.

It is not merely a case of recapitalising the banks. We must be informed as to how much money will be required in this regard and the Minister must indicate whether this will be the first, the first of many or the only round of recapitalisation. Members of the public are of the view that the banks are dictating the pace in respect of recapitalisation. Representatives of the two main banks, AIB and Bank of Ireland, came before the Joint Committee on Finance and the Public Service earlier in the week. If the share prices of client companies of these and other financial institutions had fallen by 95%, those institutions would seek that CEOs and boards of directors of such companies be removed and EGMs would be held. However, this has not happened in the banking sector.

Members of the public have a great distrust of the banks. They want the Government to show leadership but are of the view that it has not done so. We have been informed that tier 1 capital ratio levels are not sufficient to meet market requirements. However, AIB has publicly stated that it will not be seeking any recapitalisation funds from the Government. There is a contradiction in this regard. As a result, the Government must take a leadership role. The Minister indicated that the banks have put forward plans in respect of providing funds to the business sector. That may well be the case. AIB has agreed to guarantee an aggregate of €3 billion in overdraft facilities to its customers, but it is withdrawing such facilities on a daily basis.

Bank charges and interest rates in this country are significantly higher than the EU average. However, the banks will not answer questions in respect of this matter. The Government must insist the banks provide details on how they will guarantee the flow of funds when recapitalisation takes place. There is every likelihood the banks will take the funds and use them to soak up bad debts. Will funds flow to the small business sector and will the Minister obtain a guarantee in respect of house repossessions? The Government must take care of Ireland Inc. and its citizens. That is its role and is what it should be but is not doing. The banks are acting as though there have been no changes.

I am concerned, in terms of private investors coming in, that the Minister will sell out our financial sovereignty. The concern is that the Government will have no input into this and that investors will strip the cupboards bare and make a killing. Side by side, Ireland Inc. will literally fail in terms of the flow of funds. The Government should take up the suggestion made by the Small Firms Association at a meeting of the Joint Oireachtas Committee on Finance and the Public Service. It is important that round-table discussions on this measure, involving the banks, the small business sector and Government take place and that this measure is adopted by Government and made a precondition in terms of recapitalisation.

The Government is acting in a form epitomised by procrastination. This does not instil confidence and shows a lack of leadership. The Government needs to take the lead with the banks. As of now, the banks are leading the Government.

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